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qlys-20200630
QUALYS, INC.000110784310-Q6/30//2020false2020Q212/31Large Accelerated 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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 10-Q
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☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2020
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from          to
Commission file number 001-35662
__________________
QUALYS, INC.
(Exact name of registrant as specified in its charter)
__________________
Delaware77-0534145
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization)Identification Number)

919 E. Hillsdale Boulevard, 4th Floor, Foster City, California 94404
(Address of principal executive offices, including zip code)

(650) 801-6100
(Registrant’s telephone number, including area code)
__________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.001 par value per shareQLYSThe NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act).    Yes  ☐    No  x

The number of shares of the Registrant's common stock outstanding as of August 5, 2020 was 39,246,507.

Table of Contents
Qualys, Inc.
TABLE OF CONTENTS
Page
PART I – FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


2
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
Qualys, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share data)
June 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$113,909  $87,559  
Short-term marketable securities233,922  211,331  
Accounts receivable, net of allowance of $643 and $585 as of June 30, 2020 and December 31, 2019, respectively75,938  78,034  
Prepaid expenses and other current assets24,338  18,692  
Total current assets448,107  395,616  
Long-term marketable securities97,483  119,508  
Property and equipment, net63,098  60,579  
Operating leases - right of use asset42,930  40,551  
Deferred tax assets, net16,971  18,830  
Intangible assets, net13,755  16,795  
Goodwill7,447  7,447  
Restricted cash1,200  1,200  
Other noncurrent assets16,024  15,082  
Total assets$707,015  $675,608  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$1,395  $848  
Accrued liabilities24,810  22,784  
Deferred revenues, current199,732  192,172  
Operating lease liabilities, current9,161  7,663  
Total current liabilities235,098  223,467  
Deferred revenues, noncurrent19,070  20,935  
Operating lease liabilities, noncurrent45,050  44,015  
Other noncurrent liabilities23  388  
Total liabilities299,241  288,805  
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, no shares issued and outstanding at June 30, 2020 and December 31, 2019
—  —  
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 39,315,337 and 39,146,272 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
39  39  
Additional paid-in capital384,202  362,408  
Accumulated other comprehensive income2,435  1,162  
Retained earnings 21,098  23,194  
Total stockholders’ equity 407,774  386,803  
Total liabilities and stockholders’ equity$707,015  $675,608  

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3
Table of Contents
Qualys, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Revenues$88,830  $78,929  $175,093  $154,272  
Cost of revenues18,891  17,537  37,386  35,246  
Gross profit69,939  61,392  137,707  119,026  
Operating expenses:
Research and development18,058  17,695  36,041  33,532  
Sales and marketing15,783  17,165  34,013  34,480  
General and administrative10,590  10,424  21,714  20,855  
Total operating expenses44,431  45,284  91,768  88,867  
Income from operations25,508  16,108  45,939  30,159  
Other income (expense), net:
Interest expense—  (28) (3) (70) 
Interest income1,392  2,198  3,316  4,249  
Other income, net 194  231  59  8  
Total other income, net1,586  2,401  3,372  4,187  
Income before income taxes27,094  18,509  49,311  34,346  
Provision for income taxes775  2,277  4,298  4,848  
Net income$26,319  $16,232  $45,013  $29,498  
Net income per share:
Basic$0.67  $0.41  $1.15  $0.75  
Diluted$0.64  $0.39  $1.10  $0.71  
Weighted average shares used in computing net income per share:
Basic39,161  39,198  39,137  39,143  
Diluted40,919  41,530  40,928  41,570  

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Qualys, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(in thousands)
Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Net income $26,319  $16,232  $45,013  $29,498  
Other comprehensive income (loss):
Available-for-sale debt securities:
Changes in net unrealized gains, net of tax effects of ($324) and ($213) in the three months ended June 30, 2020 and 2019, respectively, and ($428) and ($251) in the six months ended June 30, 2020 and 2019, respectively.1,093  724  1,444  1,379  
Reclassification adjustments for net realized (gains) losses included in net income, net of tax effects of $5 and ($4) in the three months ended June 30, 2020 and 2019, respectively, and $30 and ($6) in the six months ended June 30, 2020 and 2019, respectively.(15) 15  (100) 43  
Total changes in unrealized gains on marketable securities, net of tax1,078  739  1,344  1,422  
Cash flow hedges:
Changes in net unrealized gains (losses), net of tax effects of $33 and ($43) in the three months ended June 30, 2020 and 2019, respectively, and ($61) and ($91) in the six months ended June 30, 2020 and 2019, respectively.(108) 148  208  351  
Reclassification adjustments for net realized (gains) losses included in net income, net of tax effects of $25 and ($13) in the three months ended June 30, 2020 and 2019, respectively, and $82 and ($16) in the six months ended June 30, 2020 and 2019, respectively.(88) 43  (279) 53  
Total changes in unrealized gains (losses) on cash flow hedges, net of tax(196) 191  (71) 404  
Other comprehensive income, net of tax882  930  1,273  1,826  
Comprehensive income$27,201  $17,162  $46,286  $31,324  

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


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Qualys, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Six Months Ended
June 30,
20202019
Cash flow from operating activities:
Net income$45,013  $29,498  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense15,633  15,809  
Loss on disposal of property and equipment—  183  
Bad debt expense299  86  
Stock-based compensation19,441  16,780  
Accretion of discounts on marketable securities(21) (1,060) 
Deferred income taxes1,269  3,047  
Changes in operating assets and liabilities:
Accounts receivable1,797  12,555  
Prepaid expenses and other assets(6,725) (6,896) 
Accounts payable220  (1,189) 
Accrued liabilities(972) (85) 
Deferred revenues5,695  12,397  
Other noncurrent liabilities—  150  
Net cash provided by operating activities81,649  81,275  
Cash flow from investing activities:
Purchases of marketable securities
(162,912) (184,829) 
Sales and maturities of marketable securities164,109  193,270  
Purchases of property and equipment(11,568) (14,138) 
Business combinations
—  (1,850) 
Net cash used in investing activities(10,371) (7,547) 
Cash flow from financing activities:
Repurchases of common stock(54,182) (24,117) 
Proceeds from exercise of stock options20,430  8,991  
Payments for taxes related to net share settlement of equity awards(11,115) (7,411) 
Principal payments under finance lease obligations
(61) (836) 
Net cash used in financing activities(44,928) (23,373) 
Net increase in cash, cash equivalents and restricted cash26,350  50,355  
Cash, cash equivalents and restricted cash at beginning of period88,759  42,226  
Cash, cash equivalents and restricted cash at end of period$115,109  $92,581  

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Qualys, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 
(unaudited)
(in thousands, except share data)
 Common StockAdditional
Paid-In
Capital		Accumulated Other
Comprehensive
Income		Retained EarningsTotal
Stockholders’
Equity
 SharesAmount
Balances at December 31, 201939,146,272  $39  $362,408  $1,162  $23,194  $386,803  
Net income—  —  —  —  18,694  18,694  
Other comprehensive income, net of tax—  —  —  391  —  391  
Issuance of common stock upon exercise of stock options144,989  —  4,714  —  —  4,714  
Repurchase of common stock(346,250) —  (4,160) —  (24,766) (28,926) 
Issuance of common stock upon vesting of restricted stock units138,260  —  —  —  —  —  
Taxes related to net share settlement of equity awards(58,598) —  (5,000) —  —  (5,000) 
Stock-based compensation—  —  10,054  —  —  10,054  
Balances at March 31, 202039,024,673  39  368,016  1,553  17,122  386,730  
Net income—  —  —  —  26,319  26,319  
Other comprehensive income, net of tax—  —  —  882  882  
Issuance of common stock upon exercise of stock options448,056  1  15,715  —  —  15,716  
Repurchase of common stock(242,500) (1) (2,912) —  (22,343) (25,256) 
Issuance of common stock upon vesting of restricted stock units146,343  —  —  —  —  
Taxes related to net share settlement of equity awards(61,235) —  (6,115) —  —  (6,115) 
Stock-based compensation—  —  9,498  —  —  9,498  
Balances at June 30, 202039,315,337  $39  $384,202  $2,435  $21,098  $407,774  


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 Common StockAdditional
Paid-In
Capital		Accumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTotal
Stockholders’
Equity
 SharesAmount
Balances at December 31, 201839,015,034  $39  $330,572  $(586) $27,964  $357,989  
Net income—  —  —  —  13,266  13,266  
Other comprehensive income, net of tax—  —  —  896  —  896  
Issuance of common stock upon exercise of stock options152,164  —  4,047  —  —  4,047  
Repurchase of common stock(94,090) —  (1,129) —  (6,742) (7,871) 
Issuance of common stock upon vesting of restricted stock units99,601  —  —  —  —  —  
Taxes related to net share settlement of equity awards(38,877) —  (3,367) —  —  (3,367) 
Stock-based compensation—  —  8,443  —  —  8,443  
Balances at March 31, 201939,133,832  39  338,566  310  34,488  373,403  
Net income—  —  —  —  16,232  16,232  
Other comprehensive income, net of tax—  —  930  —  930  
Issuance of common stock upon exercise of stock options192,687  —  4,944  —  —  4,944  
Repurchase of common stock(183,948) —  (2,207) —  (14,038) (16,245) 
Issuance of common stock upon vesting of restricted stock units126,754  —  —  —  —  —  
Taxes related to net share settlement of equity awards(45,250) —  (4,044) —  —  (4,044) 
Stock-based compensation—  —  8,378  —  —  8,378  
Balances at June 30, 201939,224,075  $39  $345,637  $1,240  $36,682  $383,598  


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Qualys, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE 1.The Company and Summary of Significant Accounting Policies

Description of Business
Qualys, Inc. (the “Company”, "we", "us", "our") was incorporated in the state of Delaware on December 30, 1999. The Company is headquartered in Foster City, California and has wholly-owned subsidiaries throughout the world. The Company is a pioneer and leading provider of cloud-based 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. The Company’s cloud solutions address the growing security and compliance complexities and risks that are amplified by the dissolving boundaries between internal and external IT infrastructures and web environments, the rapid adoption of cloud computing and the proliferation of geographically dispersed IT assets. Organizations can use the Company’s integrated suite of solutions delivered on its Qualys Cloud Platform to cost-effectively obtain a unified view of their security and compliance posture across globally distributed IT infrastructures.

Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information as well as the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of December 31, 2019, included herein, was derived from the audited financial statements as of that date but does not include all disclosures, including notes required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results of operations expected for the entire year ending December 31, 2020 or for any other future annual or interim periods. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 21, 2020.

Risks and Uncertainties
In March 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus (“COVID-19”) as a pandemic. As a result of COVID-19, the Company has modified certain aspects of its business, including restricting employee travel, requiring employees to work from home, and canceling certain events and meetings, among other modifications. The Company will continue to actively monitor the situation and may take further actions that alter its business operations as may be required by federal, state or local authorities or that the Company determines are in the best interests of its employees, customers, partners, suppliers and stockholders. While the Company has not incurred significant disruptions from the COVID-19 outbreak, the Company is unable to accurately predict the full impact that COVID-19 will have due to numerous uncertainties, including the duration of the outbreak, actions that may be taken by governmental authorities and the impact to the business of its customers and partners. The Company will continue to evaluate the nature and extent of the impact to its business, financial position, results of operations and cash flows.

Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the condensed consolidated financial statements and the reported results of operations during the reporting period. The Company’s management regularly assesses these estimates, which primarily affect revenue recognition, the valuation of accounts receivable, goodwill and intangible assets, capitalization of internally developed software, stock-based compensation and the provision for

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Qualys, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

income taxes. Actual results could differ from those estimates and such differences may be material to the accompanying unaudited condensed consolidated financial statements.

Derivative Financial Instruments
Derivative financial instruments are utilized by the Company to reduce foreign currency exchange risks. The Company uses foreign currency forward contracts to mitigate the impact of foreign currency fluctuations of certain non-U.S. dollar denominated net asset positions, to date primarily cash, accounts receivable and operating lease liabilities, as well as to manage foreign currency fluctuation risk related to forecasted transactions. Open contracts are recorded within prepaid expenses and other current assets, other noncurrent assets, accrued liabilities or other noncurrent liabilities in the condensed consolidated balance sheets. Gains and losses resulting from currency exchange rate movements on non-designated forward contracts are recognized in other income (expense), net. Any gains or losses from derivatives designated as cash flow hedges are first recorded within accumulated other comprehensive income ("AOCI") and then reclassified into revenue or operating expenses when the hedged item impacts the condensed consolidated statements of operations.

Stock-Based Compensation
The Company recognizes the fair value of its employee stock options and restricted stock units over the requisite service periods for those awards ultimately expected to vest. The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton option pricing model and the fair value of each restricted stock unit ("RSU") is based on the price of the Company's stock on the date of grant. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates.
The Company has issued performance-based awards and stock options, and accounts for these awards and options as stock-based compensation with multiple performance conditions. For these performance-based awards, the Company records compensation expense for only the performance milestones that are probable of being achieved, with such expense recorded on a straight-line basis over the expected vesting period. The Company reassesses performance-based estimates each reporting period and if there are any changes in the probability of achievement, the Company recognizes the cumulative effect in the period when the estimate changes.  

Non-Marketable Securities
During the fiscal year ended December 31, 2018, the Company invested $2.5 million in preferred stock of a privately-held company. The fair value of the investment is not readily available, and there are no quoted market prices for the investment. The investment is included in other noncurrent assets on the condensed consolidated balance sheets and measured at cost less impairment, adjusted for observable price changes. The investment is assessed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the second quarter ended June 30, 2019, the Company made an advance payment of $0.6 million to the investee for certain development work, which is recorded in other noncurrent assets on the condensed consolidated balance sheet. During the third quarter ended September 30, 2019, the Company made an additional investment of $0.6 million in a convertible security issued by this investee and recorded it in other current assets on the condensed consolidated balance sheet. As of June 30, 2020 and December 31, 2019, no impairment was recorded for the investments.

Recently Adopted Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs related to internal-use software. It also requires the Company to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The Company adopted this ASU prospectively to applicable implementation costs incurred since January 1, 2020. The adoption did not have a material impact on the Company's condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) as modified by subsequently issued ASU No. 2018-19, 2019-04 and 2019-05, which introduces a new accounting model,

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Qualys, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Current Expected Credit Losses ("CECL"). CECL requires earlier recognition of credit losses, while also providing additional transparency about credit risk. CECL utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The Company adopted this ASU on January 1, 2020, using a modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. The adoption did not have a material impact on the Company's condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted
In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) ("ASU 2020-01"). This ASU clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. It is effective for the Company beginning in the first quarter of fiscal 2021, and earlier adoption is permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2020-01 on the Company's condensed consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for the Company for fiscal years beginning after December 15, 2020. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the impacts of the provisions of ASU 2019-12 on its condensed consolidated financial statements.

NOTE 2.Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For certain of the Company’s financial instruments, including certain cash equivalents, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate their fair values due to the relatively short maturity of these balances.
The Company measures and reports certain cash equivalents, marketable securities, derivative foreign currency forward contracts and commitments associated with prior business combinations at fair value in accordance with the provisions of the authoritative accounting guidance that addresses fair value measurements. This guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
Level 1-Valuations based on quoted prices in active markets for identical assets or liabilities.
Level 2-Valuations based on other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3-Valuations based on inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.


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Qualys, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

The Company's Level 1 assets include a highly liquid money market funds, which are valued using unadjusted quoted prices that are available in an active market for an identical asset. Level 2 assets include fixed-income U.S. government agency securities, commercial paper, corporate bonds, asset-backed securities and derivative financial instruments consisting of foreign currency forward contracts. The securities, bonds and commercial paper are valued using prices from independent pricing services based on quoted prices in active markets for similar instruments or on industry models using data inputs such as interest rates and prices that can be directly observed or corroborated in active markets. The foreign currency forward contracts are valued using observable inputs, such as quotations on forward foreign exchange points and foreign interest rates. During the fiscal years ended December 31, 2019 and 2018, the Company made investments of $0.6 million in a convertible security and $2.5 million in preferred stock, respectively, issued by a privately-held company. The estimated fair value of the investments was determined based on Level 3 inputs. As of June 30, 2020 and December 31, 2019, management estimated that the fair value of the investments equaled their carrying value.

The Company's cash and cash equivalents, and marketable securities consist of the following:
 June 30, 2020
  Amortized CostUnrealized GainsUnrealized (Losses)Fair Value
(in thousands)
Cash and cash equivalents:
Cash$106,272  $—  $—  $106,272  
Money market funds5,638  —  —  5,638  
Commercial paper1,999  —  —  1,999  
Total113,909  —  —  113,909  
Short-term marketable securities:
Commercial paper1,847  2  —  1,849  
Corporate bonds24,289  227  —  24,516  
Asset-backed securities6,511  52  —  6,563  
U.S. government agencies200,419  580  (5) 200,994  
Total233,066  861  (5) 233,922  
Long-term marketable securities:
Asset-backed securities35,441  407  —  35,848  
U.S. government agencies14,544  444  —  14,988  
Foreign government agencies1,005  34  —  1,039  
Corporate bonds44,542  1,066  —  45,608  
Total95,532  1,951  —  97,483  
Total$442,507  $2,812  $(5) $445,314  


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Qualys, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

 December 31, 2019
  Amortized CostUnrealized GainsUnrealized (Losses)Fair Value
(in thousands)
Cash and cash equivalents:
Cash$84,102  $—  $—  $84,102  
Money market funds58  —  —  58  
Commercial paper3,399  —  —  3,399  
Total87,559  —  —  87,559  
Short-term marketable securities: