QUALYS, INC.
For the period ended Dec 31, 2025. Filed Feb 20, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 20, 2026
QLYS$190.41-4.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001107843-25-000009
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-20.
0001107843-26-000008
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 85 current paragraphs.
64 unchanged; 15 reworded; 6 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
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 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. We have recognized the effects of the OBBBA provisions in our financial results to the extent they are applicable to the year ended December 31, 2025. We 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.
Current report
Research and development expenses increased by $5.4 million in 2025 compared to 2024, primarily due to an increase in personnel costs of $4.4 million, driven by additional employees hired to support the growth of our business and an increase in incentive compensation, an increase in overhead allocations of $1.8 million, and an increase in shared cloud platform costs of $1.0 million, partially offset by a decrease in stock-based compensation of $1.1 million driven by lower average grant-date fair value and geographic mix, and a decrease in professional service expense of $0.7 million.
Current report
Sales and marketing expenses increased by $15.2 million in 2025 compared to 2024, primarily due to an increase in personnel costs of $8.8 million, driven by an increase in headcount and higher sales commissions and incentive compensation, an increase in marketing expenses of $4.2 million, primarily related to digital advertising, sales event and sponsorship, an increase in travel expenses of $1.5 million, and an increase in overhead allocations of $0.7 million.
Current report
General and administrative expenses increased by $2.9 million in 2025 compared to 2024, primarily due to an increase in personnel costs, including stock-based compensation, of $4.1 million, driven by an increase in headcount and higher incentive compensation due to higher achievement rates compared to 2024, and an increase in license expenses of $0.9 million, partially offset by an increase in overhead allocations to other expense categories of $2.1 million.
Current report
Income tax provision increased by$12.4 million in 2025 compared to 2024, primarily due to the tax effect of a decrease in the benefit from FDII deduction as a result of the enactment of the OBBBA, along with a decrease in excess tax benefits from stock-based compensation and a decrease in tax benefits from other discrete adjustments compared to the prior year.
Current report
Our net dollar expansion rate was 103% for both the years ended December 31, 2025 and 2024.
Removed paragraphs (6)
Previous report
Research and development expenses increased by $1.4 million in 2024 compared to 2023, primarily due to an increase in personnel costs, including stock-based compensation, of $2.8 million, driven by increased headcount, partially offset by a decrease in depreciation and amortization expense in property and equipment of $0.8 million, and a decrease in overhead allocation of $0.6 million.
Previous report
Sales and marketing expenses increased by $16.6 million in 2024 compared to 2023, primarily due to an increase in personnel costs, including stock-based compensation, of $12.9 million, driven by increased headcount, an increase in travel and entertainment cost of $1.8 million, an increase in marketing expenses related to trade shows of $0.7 million, an increase in overhead allocation of $0.7 million, and an increase in subscribed license and software costs of $0.5 million.
Previous report
General and administrative expenses increased by $7.0 million in 2024 compared to 2023, primarily due to an increase in personnel costs, including stock-based compensation, of $6.3 million, driven by increased headcount, annual merit increases and refresh grants to eligible employees and executives, and an increase in subscribed software costs and other expenses of $0.7 million.
Previous report
Income tax provision increased by$9.1 million in 2024 compared to 2023, primarily due to the tax effect of an increase in pretax income, increase in foreign withholding taxes, decrease in excess tax benefit from stock-based compensation compared to prior year, and decrease in other discrete tax adjustments. The increase in tax expense was partially offset by an increase in foreign derived intangible income benefit, an increase in research and development tax credits, and the recognition of an income tax benefit related to uncertain tax positions due to statute lapse.
Previous report
For the year ended December 31, 2024, our income tax provision included a benefit of $2.5 million related to an increase in foreign derived intangible income benefit and research and development tax credits associated with our U.S. income tax return filed during the year.
Previous report
Our net dollar expansion rates were 103% and 105% for the years ended December 31, 2024 and 2023, respectively.
Reworded paragraphs (15)
Previous wording
We are a leading provider of a cloud-based platform delivering information technology (IT), security and compliance solutions that enable organizations to identify security risks to their IT infrastructures, help protect their IT systems and applications from ever-evolving cyber-attacks and achieve compliance with internal policies and external regulations. Our cloud platform addresses the growing security and compliance complexities and risks that are amplified by the dissolving boundaries between IT infrastructures and web environments, the rapid adoption of cloud computing, containers and serverless IT models, and the proliferation of geographically dispersed IT assets. Our integrated suite of IT, security and compliance solutions delivered on Qualys' Enterprise TruRisk Platform enables our customers to identify and manage their IT and operational technology (OT) assets, collect and analyze large amounts of IT security data, discover and prioritize vulnerabilities, quantify cyber risk exposure, recommend and implement remediation actions and verify the implementation of such actions. Organizations use our integrated suite of solutions to cost-effectively obtain a unified view of their internal and external IT and OT asset inventory as well as security and compliance posture across globally-distributed IT infrastructures as our solution offers a single platform for information technology, information security, application security, endpoint, developer security and cloud teams.
Current wording
We are a leading provider of a cloud-based platform delivering information technology (IT), security and compliance solutions that enable organizations to identify security risks to their IT infrastructures, help protect their IT systems and applications from ever-evolving cyber-attacks and achieve compliance with internal policies and external regulations. Our cloud platform addresses the growing security and compliance complexities and risks that are amplified by the dissolving boundaries between IT infrastructures and web environments, the rapid adoption of cloud computing, containers and serverless IT models, and the proliferation of geographically dispersed IT assets. Our integrated suite of IT, security and compliance solutions delivered on Qualys' Enterprise TruRisk Platform enables our customers to identify and manage their IT and operational technology (OT) assets, collect and analyze large amounts of IT security data, discover and prioritize vulnerabilities, quantify cyber risk exposure, recommend and implement remediation actions and verify the implementation of such actions. Organizations use our integrated suite of solutions to cost-effectively obtain a unified view of their internal and external IT and OT asset inventory as well as security and compliance posture across globally-distributed IT infrastructures as our solution offers a single platform for IT, information security, application security, endpoint, developer security and cloud teams.
Previous wording
We market and sell our solutions to enterprises, government entities and small and medium-sized businesses across a broad range of industries, including education, financial services, government, healthcare, insurance, manufacturing, media, retail, technology and utilities. In 2024, 2023 and 2022, 58%, 60% and 60%, respectively, of our revenues were derived from customers in the United States based on our customers' billing addresses. We sell our solutions to enterprises and government entities primarily through our field sales force and to small and medium-sized businesses through our inside sales force. We generate a significant portion of sales through our channel partners, including managed security service providers, leading cloud providers, value-added resellers and consulting firms in the United States and internationally.
Current wording
We market and sell our solutions to enterprises, government entities and small and medium-sized businesses across a broad range of industries, including education, financial services, government, healthcare, insurance, manufacturing, media, retail, technology and utilities. In 2025, 2024 and 2023, 56%, 58% and 60%, respectively, of our revenues were derived from customers in the United States based on our customers' billing addresses. We sell our solutions to enterprises and government entities primarily through our field sales force and to small and medium-sized businesses through our inside sales force. We generate a significant portion of sales through our channel partners, including managed security service providers, leading cloud providers, value-added resellers and consulting firms in the United States and internationally.
Previous wording
The uncertainty surrounding macroeconomic factors in the U.S. and globally characterized by inflationary pressure, high interest rates, significant volatility of global markets, reduced spending and extended sales cycles, and geopolitical conflicts could have a material adverse effect on our long-term business and could lead to further economic disruption and expose us to greater risk as our current and potential customers may reduce or eliminate their overall spending on IT security. We will continue to evaluate the nature and extent of the impact to our business, financial position, results of operations and cash flows.
Current wording
The uncertainty surrounding macroeconomic factors in the U.S. and globally characterized by inflationary pressure, high interest rates, significant volatility of global markets, reduced spending and extended sales cycles, tariff and non-tariff trade barriers, economic and regulatory uncertainty, and geopolitical conflicts could have a material adverse effect on our long-term business and could lead to further economic disruption and expose us to greater risk as our current and potential customers may reduce or eliminate their overall spending on IT security. We will continue to evaluate the nature and extent of the impact to our business, financial position, results of operations and cash flows.
Previous wording
Revenues increased by$53.1 million in 2024 compared to 2023, driven by increased demand for our subscription services by our end customers. Of the total increase of$53.1 million in revenues, 69% was from customers existing at or prior to December 31, 2023, and the remaining 31% was from new customers added in 2024. Of the total increase of$53.1 million, 42% was from customers in the United States and the remaining 58% was from customers in foreign countries. In 2024, 54% of total revenues were direct and 46% of total revenues were through partners. Of the total increase of$53.1 million, 20% was direct and the remaining 80% was from partners.
Current wording
Revenues increased by$61.6 million in 2025 compared to 2024, driven by increased demand for our subscription services by our end customers. Of the total increase of$61.6 million in revenues, 76% was from customers existing at or prior to December 31, 2024, and the remaining 24% was from new customers added in 2025. Of the total increase of$61.6 million, 37% was from customers in the United States and the remaining 63% was from customers in foreign countries. In 2025, 51% of total revenues were direct and 49% of total revenues were through partners. Of the total increase of$61.6 million, 20% was direct and the remaining 80% was from partners.
Previous wording
Cost of revenues increased by$4.0 million in 2024 compared to 2023, primarily due to an increase in shared cloud platform cost of $6.0 million, an increase in personnel costs, including stock-based compensation, of $4.6 million, driven by additional employees hired to support the growth of our business, an increase in license expenses and professional service expenses of $1.2 million, partially offset by a decrease in depreciation and amortization expense of $7.8 million resulting from certain of our assets becoming fully depreciated or amortized.
Current wording
Cost of revenues increased by$3.3 million in 2025 compared to 2024, primarily due to an increase in personnel costs of $4.7 million, driven by additional employees hired to support the growth of our business and an increase in incentive compensation, an increase in license expenses of $1.9 million, partially offset by a decrease in depreciation and amortization expense of $3.3 million resulting from certain of our assets becoming fully depreciated or amortized.
Previous wording
Total other income, net increased by $7.0 million in 2024 compared to 2023, primarily due to an increase in interest income of $8.9 million driven by an increase in our average daily cash and investment balance, a non-recurring unrealized loss of $0.5 million on a non-marketable equity security recognized during 2023, partially offset byan increase in foreign currency loss of $2.4 million.
Current wording
Total other income, net increased by $2.3 million in 2025 compared to 2024, primarily due to favorable changes in foreign currency of $2.8 million, partially offset by a decrease in interest income of $0.5 million.
Previous wording
As of December 31, 2024, our principal source of liquidity was cash, cash equivalents and marketable securities of $575.3 million, including $119.9 million of cash held outside of the United States. The following summary of cash flows for the periods indicated have been derived from our consolidated financial statements included elsewhere in this report:
Current wording
As of December 31, 2025, our principal source of liquidity was cash, cash equivalents and marketable securities of $696.8 million, including $155.3 million of cash held outside of the United States. The following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this report:
Previous wording
In 2024, we generated$243.9 million of cash from our net income, as adjusted for non-cash items mainly related to stock-based compensation expense, depreciation and amortization expense and deferred taxes, as compared to$226.4 million in 2023. In addition, we also generated$0.2 million of cash from working capital change in 2024, of which$11.7 million was related to the increases in accounts receivable and deferred revenue due to the timing of collections and growth in billings, a$3.2 million increase in payables and accrued liabilities driven by the timing of payment, partially offset by a$14.7 million increase in prepaid expenses. In 2023, we generated $226.4 million of cash from our net income, as adjusted for non-cash items mainly related to stock-based compensation expense, depreciation and amortization expense and deferred taxes. In addition, we also generated $18.2 million of cash from working capital change in 2023, of which $22.7 million was related to the net increase in deferred revenue and accounts receivable due to the growth in billing and the timing of collections, partially offset by a $1.1 million decrease in payables and accrued liabilities and a $3.4 million increase in prepaid expenses primarily driven by the timing of payments.
Current wording
In 2025, we generated$296.0 million of cash from our net income, as adjusted for non-cash items mainly related to stock-based compensation expense, depreciation and amortization expense and deferred taxes, as compared to$243.9 million in 2024. In addition, we also generated$13.4 million of cash from working capital change in 2025, of which$14.0 million was related to the net favorable change in accounts receivable and deferred revenue due to the growth in billings and collections, partially offset by an$0.6 million net unfavorable change in prepaid expenses and payables and accrued liabilities due to the timing of payments. In 2024, we generated $243.9 million of cash from our net income, as adjusted for non-cash items mainly related to stock-based compensation expense, depreciation and amortization expense and deferred taxes. In addition, we also generated $0.2 million of cash from working capital change in 2024, of which $11.7 million was related to the increases in accounts receivable and deferred revenue due to the timing of collections and growth in billings, a $3.2 million increase in payables and accrued liabilities driven by the timing of payment, partially offset by a $14.7 million increase in prepaid expenses.
Previous wording
In 2024, we used$59.1 million of cash for purchases of marketable securities net of sales and maturities, and used$12.3 million of cash in capital expenditures mainly related to computer equipment to support our growth and development and leasehold improvement for expansion of our office spaces and shared cloud platform facilities, as compared to the use of $64.4 million of cash for purchases of marketable securities net of sales and maturities, and the use of $8.8 million of cash in capital expenditures mainly related to computer equipment to support our growth and development in 2023.
Current wording
In 2025, we used$100.9 million of cash for purchases of marketable securities net of sales and maturities, and used$5.0 million of cash in capital expenditures mainly related to computer equipment to support our growth and development and leasehold improvement for expansion of our office spaces, as compared to the use of $59.1 million of cash for purchases of marketable securities net of sales and maturities, and the use of $12.3 million of cash in capital expenditures mainly related to computer equipment to support our growth and development and leasehold improvement for expansion of our office spaces and shared cloud platform facilities in 2024.
Previous wording
In 2024, we used$139.9 million of cash for share repurchases and$28.4 million of cash in payment of employee withholding taxes upon vesting of restricted stock units and $1.5 million payment of cash held in escrow as part of the Blue Hexagon acquisition on October 4, 2022, partially offset by$17.3 million of proceeds from employee exercise of stock options and$6.9 millionof proceeds from issuance of common stock through our employee stock purchase plan ("ESPP"), as compared to $170.8 million of cash for share repurchase and $22.3 million of cash in payment of employee withholding taxes upon vesting of restricted stock units, partially offset by $45.6 million of proceeds from employee exercise of stock options and $6.1 million of proceeds from issuance of common stock through our ESPP in 2023.
Current wording
In 2025, we used$183.4 million of cash for share repurchases and$25.0 million of cash in payment of employee withholding taxes upon vesting of restricted stock units, partially offset by$16.3 million of proceeds from employee exercise of stock options and$6.8 millionof proceeds from issuance of common stock through our employee stock purchase plan (ESPP), as compared to $139.9 million of cash for share repurchase and $28.4 million of cash in payment of employee withholding taxes upon vesting of restricted stock units and $1.5 million payment of cash held in escrow as part of the Blue Hexagon acquisition on October 4, 2022, partially offset by $17.3 million of proceeds from employee exercise of stock options and $6.9 million of proceeds from issuance of common stock through our ESPP in 2024.
Previous wording
•Our operating lease obligations to make payments under our non-cancelable lease agreements for our facilities and shared cloud platforms. We had fixed operating lease payment obligations of $59.9 million as of December 31, 2024, with $13.5 million expected to be paid within the next 12 months.
Current wording
•Our operating lease obligations to make payments under our non-cancelable lease agreements for our facilities and shared cloud platforms. We had fixed operating lease payment obligations of $69.0 million as of December 31, 2025, with $11.4 million expected to be paid within the next 12 months.
Previous wording
•Cash outflow for capital expenditures in 2025 is expected to be in a range of $8.0 million to $13.0 million. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing, type and extent of our spending on research and development efforts, international expansion and investment in shared cloud platforms and cloud infrastructures. We may also seek to invest in or acquire complementary businesses or technologies.
Current wording
•Cash outflow for capital expenditures in 2026 is expected to be in a range of $8.0 million to $12.0 million. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing, type and extent of our spending on research and development efforts, international expansion and investment in shared cloud platforms and cloud infrastructures. We may also seek to invest in or acquire complementary businesses or technologies.
Previous wording
•Other non-cancelable purchase obligations related to cloud infrastructures and other service providers totaled $70.5 million, of which $39.2 million is expected to be paid within the next 12 months.
Current wording
•Other non-cancelable purchase obligations related to cloud infrastructures and other service providers totaled $60.2 million, of which $13.2 million is expected to be paid within the next 12 months.
Previous wording
We expect to continue to use cash to repurchase shares in 2025 under our share repurchase program authorized by our board of directors on February 5, 2018. As of December 31, 2024, approximately $143.4 million remained available under our share repurchase program. Shares will be repurchased from time to time in privately negotiated transactions or on the open market in accordance with Rule 10b-18 of the Exchange Act of 1934, including pursuant to a pre-set trading plan adopted in accordance with Rule 10b5-1 under the Exchange Act. On February 6, 2025, we announced that our board of directors authorized an additional $200.0 million under the share repurchase program, increasing the total amount of authorized repurchase to $1.4 billion.
Current wording
We expect to continue to use cash to repurchase shares in 2026 under our share repurchase program authorized by our board of directors on February 5, 2018. As of December 31, 2025, approximately $160.5 million remained available under our share repurchase program. Shares will be repurchased from time to time in privately negotiated transactions or on the open market in accordance with Rule 10b-18 of the Exchange Act of 1934, including pursuant to a pre-set trading plan adopted in accordance with Rule 10b5-1 under the Exchange Act. On February 5, 2026, we announced that our board of directors authorized an additional $200.0 million under the share repurchase program, increasing the total amount of authorized repurchase to $1.6 billion.
Previous wording
We recognize the fair value of our employee stock options and restricted stock units, including performance-based restricted stock units, over the requisite service period. The fair value of each stock option is estimated on date of grant using the Black-Scholes-Merton option pricing model. Determining the appropriate fair value model and calculating the fair value of employee stock options requires the use of subjective assumptions, including the expected life of the stock option and stock price volatility. The recognition of expenses for performance based restricted stock units requires us to estimate the probability that the performance condition will be achieved and the number of awards that will vest are adjusted accordingly at each reporting period. The assumptions used in calculating the fair value of employee stock options and estimating the probability of achievement of performance metrics represent management’s best estimates, which require significant judgment and involve inherent uncertainties. If factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.
Current wording
We recognize the fair value of our employee stock options and restricted stock units (RSU), including performance-based restricted stock units (PRSU), over the requisite service period. The fair value of each stock option is estimated on date of grant using the Black-Scholes-Merton option pricing model. Determining the appropriate fair value model and calculating the fair value of employee stock options requires the use of subjective assumptions, including the expected life of the stock option and stock price volatility. The recognition of expenses for performance based restricted stock units requires us to estimate the probability that the performance condition will be achieved and the number of awards that will vest are adjusted accordingly at each reporting period. The assumptions used in calculating the fair value of employee stock options and estimating the probability of achievement of performance metrics represent management’s best estimates, which require significant judgment and involve inherent uncertainties. If factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.