SEC Comment Letter 0000000000-22-013316 to QUALYS, INC. (QLYS) (CIK 0001107843) (QLYS)
QUALYS, INC. (QLYS) (CIK 0001107843)
Date: Dec. 9, 2022 · CIK: 0001107843 · Accession: 0000000000-22-013316
AI Filing Summary & Sentiment
File numbers found in text: 001-35662
Letter
United States securities and exchange commission logo December 9, 2022 Joo Mi Kim Chief Financial Officer Qualys, Inc 919 E. Hillsdale Boulevard, 4th Floor Foster City, CA 94404 Re:Qualys, Inc. Form 10-K for the Fiscal Year Ended December 31, 2021 Filed on February 22, 2022 File No. 001-35662 Dear Joo Mi Kim: We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10-K for the Fiscal Year Ended December 31, 2021 Management's Discussion and Analysis of Financial Condition and Results of Operations, page 1.We note your discussion of the net dollar expansion in your Q3 2022 earnings call and your statement that this rate speaks to the power of your platform and improving land and expand sales model. Considering your growth strategy is dependent on retaining and growing your existing customer base, please revise to include a quantified discussion of this measure for each period presented along with a description of how such measure is calculated and explain any significant fluctuations. Alternatively, tell us what measures management uses to monitor your ability to retain and grow your customer usage and include a quantified discussion of such measure. Similarly we note your reference to billings information in your Forms 8-K. Given you state that this measure assists investors in assessing your operating performance, tell us why you have not included a quantified discussion of billings in your Forms 10-K and 10-Q, or revise. Refer to SEC Release 33-10751.
FirstName LastNameJoo Mi Kim Comapany NameQualys, Inc December 9, 2022 Page 2 FirstName LastName Joo Mi Kim Qualys, Inc December 9, 2022 Page 2 Results of Operations Comparison of Years Ended December 31, 2021 and 2020, page 42 2.You state that revenue growth was "primarily" from an increase in renewal and expansion business in 2021 compared to 2020. Please revise to disclose the dollar or percentage increase in revenue growth from new versus existing customers and refrain from using terms such as primarily in lieu of providing more specific quantitative information. Refer to Item 303(b) of Regulation S-K. Key Non-GAAP Metric, page 45 3.We note you present the percentage of adjusted EBITDA to total revenue. Please revise to also present the comparable GAAP measure of net income as a percentage of total revenue with equal or greater prominence. Refer to Question 102.10 of the non-GAAP C&DIs. Notes to Consolidated Financial Statements Note 2. Fair Value of Financial Instruments, page 62 4.Please reconcile for us the the table of cash and cash equivalents and marketable securities by investment type on page 62 to the fair value hierarchy table on page 63. In this regard, the table on page 62 shows $55,574 in U.S. Treasury and government agencies at December 31, 2021 while the hierarchy table shows $254,527. Similar discrepancies appear to exist in the other investment categories as well. Note 13. Segment and Geographic Information, page 78 5.We note approximately 39% of your revenue was from foreign jurisdictions. Please tell us whether revenue from any individual foreign county is material and if so, how you considered the guidance in ASC 280-10-50-41. In closing, we remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Megan Akst, Senior Staff Accountant at (202) 551-3407 or Kathleen Collins, Accounting Branch Chief, at (202) 551-3499 with any questions. Sincerely, Division of Corporation Finance Office of Technology cc: Raj Judge
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United States securities and exchange commission logo
December 9, 2022
Joo Mi Kim
Chief Financial Officer
Qualys, Inc
919 E. Hillsdale Boulevard, 4th Floor
Foster City, CA 94404
Re:Qualys, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2021
Filed on February 22, 2022
File No. 001-35662
Dear Joo Mi Kim:
We have limited our review of your filing to the financial statements and related
disclosures and have the following comments. In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response. After
reviewing your response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2021
Management's Discussion and Analysis of Financial Condition and Results of Operations, page
39
1.We note your discussion of the net dollar expansion in your Q3 2022 earnings call and
your statement that this rate speaks to the power of your platform and improving land and
expand sales model. Considering your growth strategy is dependent on retaining and
growing your existing customer base, please revise to include a quantified discussion of
this measure for each period presented along with a description of how such measure is
calculated and explain any significant fluctuations. Alternatively, tell us what measures
management uses to monitor your ability to retain and grow your customer usage and
include a quantified discussion of such measure. Similarly we note your reference to
billings information in your Forms 8-K. Given you state that this measure assists
investors in assessing your operating performance, tell us why you have not included a
quantified discussion of billings in your Forms 10-K and 10-Q, or revise. Refer to SEC
Release 33-10751.
FirstName LastNameJoo Mi Kim
Comapany NameQualys, Inc
December 9, 2022 Page 2
FirstName LastName
Joo Mi Kim
Qualys, Inc
December 9, 2022
Page 2
Results of Operations
Comparison of Years Ended December 31, 2021 and 2020, page 42
2.You state that revenue growth was "primarily" from an increase in renewal and expansion
business in 2021 compared to 2020. Please revise to disclose the dollar or percentage
increase in revenue growth from new versus existing customers and refrain from using
terms such as primarily in lieu of providing more specific quantitative information. Refer
to Item 303(b) of Regulation S-K.
Key Non-GAAP Metric, page 45
3.We note you present the percentage of adjusted EBITDA to total revenue. Please revise
to also present the comparable GAAP measure of net income as a percentage of total
revenue with equal or greater prominence. Refer to Question 102.10 of the non-GAAP
C&DIs.
Notes to Consolidated Financial Statements
Note 2. Fair Value of Financial Instruments, page 62
4.Please reconcile for us the the table of cash and cash equivalents and marketable securities
by investment type on page 62 to the fair value hierarchy table on page 63. In this regard,
the table on page 62 shows $55,574 in U.S. Treasury and government agencies at
December 31, 2021 while the hierarchy table shows $254,527. Similar discrepancies
appear to exist in the other investment categories as well.
Note 13. Segment and Geographic Information, page 78
5.We note approximately 39% of your revenue was from foreign jurisdictions. Please tell
us whether revenue from any individual foreign county is material and if so, how you
considered the guidance in ASC 280-10-50-41.
In closing, we remind you that the company and its management are responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or
absence of action by the staff.
You may contact Megan Akst, Senior Staff Accountant at (202) 551-3407 or Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 with any questions.
Sincerely,
Division of Corporation Finance
Office of Technology
cc: Raj Judge