UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34803

Qlik Technologies Inc.

(Exact name of registrant as specified in its charter)

Delaware		20-1643718
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
150 N. Radnor Chester Road, Suite E220
Radnor, Pennsylvania		19087
(Address of principal executive offices)		(Zip Code)

(888) 828-9768
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

(Title of each class)		(Name of each exchange on which registered)
Common Stock, $0.0001 par value		The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None.
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filed, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer.” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of March 11, 2011, there were 79,013,474 shares of the registrant’s common stock issued and outstanding. As of June 30, 2010, the last business day of the registrant’s most recently completed second fiscal quarter, the registrant’s common stock was not listed on any exchange or over-the-counter market. The registrant’s common stock began trading on The NASDAQ Global Market on July 16, 2010. As of December 31, 2010, the aggregate market value of shares of common stock held by non-affiliates of the registrant was $1.0 billion based on the number of shares held by non-affiliates as of December 31, 2010 and based on the last reported sale price of the registrant’s common stock on December 31, 2010. For purposes of this disclosure, shares of common stock held by persons who hold more than 5% of the outstanding shares of common stock and shares held by executive officers and directors of the registrant have been excluded because such persons may be deemed to be affiliates. This determination of executive officer or affiliate status is not necessarily a conclusive determination for other purposes.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the definitive Proxy Statement to be used in connection with the registrant’s 2011 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K to the extent stated. That Proxy Statement will be filed within 120 days of registrant’s fiscal year ended December 31, 2010.

 

 

TABLE OF CONTENTS

PART I
Special Note Regarding Forward-Looking Statements			1
Item 1. Business			2
Item 1A. Risk Factors			13
Item 1B. Unresolved Staff Comments			25
Item 2. Properties			26
Item 3. Legal Proceedings			26
Item 4. Removed and Reserved			26
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			27
Item 6. Selected Consolidated Financial Data			30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			49
Item 8. Financial Statements and Supplementary Data			50
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures			50
Item 9A. Controls and Procedures			50
Item 9B. Other Information			50
PART III
Item 10. Directors, Executive Officers and Corporate Governance			51
Item 11. Executive Compensation			52
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			52
Item 13. Certain Relationships and Related Transactions, and Directors Independence			52
Item 14. Principal Accountant Fees and Services			52
PART IV
Item 15. Exhibits and Financial Statement Schedules			52
Signatures			53
Exhibit 10.21A
Exhibit 10.21B
Exhibit 10.21C
Exhibit 10.42
Exhibit 21.1
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART I

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K, except for historical financial information contained herein, contains forward-looking statements, including, but not limited to, statements regarding the value and effectiveness of our products, the introduction of product enhancements or additional products and our growth, expansion and market leadership, that involve risks, uncertainties, assumptions, and other factors which, if they do not materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “predicts,” “plan,” “expects,” “anticipates,” “believes,” “goal,” “target,” “estimate,” “potential,” “may,” “will”, “might,” “could,” “anticipate,” “momentum,” and similar words. We intend all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to:

•

risk and uncertainties inherent in our business;

•

our ability to attract new customers and retain existing customers;

•

our ability to effectively sell, service and support our products;

•

our ability to manage our international operations;

•

our ability to compete effectively;

•

our ability to develop and introduce new products and add-ons or enhancements to existing products;

•

our ability to continue to promote and maintain our brand in a cost-effective manner;

•

our ability to manage growth;

•

our ability to attract and retain key personnel;

•

the scope and validity of intellectual property rights applicable to our products;

•

adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which we operate; and

•

other risks discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of this Annual Report on Form 10-K and elsewhere in this report.

Past performance is not necessarily indicative of future results. There can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

The forward-looking statements in this Annual Report on Form 10-K represent our views as of the date of this Annual Report on Form 10-K. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report on Form 10-K.

ITEM 1.		BUSINESS

Overview

Qlik Technologies Inc. (“We, QlikTech or the Company”) has pioneered a powerful, user-driven business intelligence solution that enables our customers to make better and faster business decisions. Our Business Discovery platform, QlikView, combines enterprise-class analytics and search functionality with the simplicity and ease-of-use found in office productivity software tools for a broad set of business users. QlikView is powered by our in-memory associative search technology, which has utilized rapid advances in computing power to yield significant improvement in flexibility and performance at a lower cost than traditional business intelligence solutions. We have grown our customer base from over 4,000 active customers in 2006 to approximately 18,000 active customers as of December 31, 2010 and increased our revenue at a 50.4% compound annual growth rate during the same period. We added an average of approximately 400 new customers per month during fiscal year 2010. Our solution addresses the needs of a diverse range of customers from middle market customers to large enterprises such as Autodesk, Campbell Soup Company, Colonial Life, The Dannon Company, Inc., Heidelberger Druckmaschinen AG, ING, Kraft Foods, Lifetime Brands, Nasdaq OMX, National Health Service (NHS), Qualcomm, Symantec and Volvo Car UK Limited. We have customers in over 100 countries, and approximately 75% of our revenue for the year ended December 31, 2010 was derived internationally.

QlikView empowers business users to navigate data in a manner consistent with the fluid, associative nature of human thought. Our technology platform enables users to consolidate large, disparate data sets and discover relationships within data in real time when requested by the user. QlikView visualizes data in a simple, intuitive user interface that enables users to interactively explore and analyze information. The ease-of-use and flexibility of QlikView enables a broad set of business users, such as sales, marketing, human resources and finance professionals; executive management and other managers; operations, support and information technology (“IT”) staff; data analysts and statisticians. Examples of QlikView users include:

•

Operations Planner — uses QlikView to prepare inventory forecasts for a global food manufacturer resulting in significant improvement in forecast accuracy and reduced transportation and workforce costs

•

Pharmaceutical Sales Representative — uses QlikView to access current industry sales trends and doctor prescription history while on a sales call with a busy physician

•

Chief Information Officer — uses QlikView to analyze IT spending and budget information to identify opportunities for cost savings and service level improvement

•

Police Sergeant — uses QlikView to maintain a consolidated view of crime levels and optimize staffing allocations to dispatch police into high crime areas

We have a differentiated business model designed to accelerate the adoption of our product by reducing the time and cost to purchase and implement our software. Our low risk approach to product sales provides a needed alternative to costly, all-or-nothing, traditional business intelligence sales models. We initially focus on specific business users or departments within a prospective customer’s organization and seek to solve a targeted business need. After demonstrating QlikView’s benefits to initial adopters within an organization, we work to expand sales of our product to other business units, geographies and use cases with the long-term goal of broad organizational deployment. We have a diversified distribution model that consists of a direct sales force and a partner network of resellers, original equipment manufacturers (“OEM”) relationships and systems integrators. Additionally, our online QlikCommunity provides us with a loyal and growing network of users who promote our software, provide support for other users and contribute valuable insights and feedback for our product development efforts.

For the years ended December 31, 2010, 2009 and 2008, our revenue was $226.5 million, $157.4 million and $118.3 million, representing year-over-year growth of 44% in 2010 and 33% in 2009. In addition, we generated operating income of $27.6 million, $13.2 million and $1.6 million for the years ended December 31, 2010, 2009 and 2008. For the year ended December 31, 2010, software license revenue and maintenance revenue comprised 90% of our total revenue and professional services revenue comprised 10% of our total revenue.

The Company currently operates in one business segment, namely, the development, commercialization and implementation of software products and related services. See Note 11 to our consolidated financial statements, Business and Geographical Segment Information, for information regarding our business and the geographies in which we operate.

Our Industry

Use of Business Intelligence and Data Analytics Tools

We believe that to succeed in today’s increasingly competitive markets, businesses must accelerate the rate at which they identify and respond to changing business conditions. An organization’s market agility and ultimate success in the global marketplace are dependent upon its ability to enable business users across organizations to harness the power of increasing volumes of information to make effective business decisions. In seeking to gain an information advantage, many organizations have implemented a range of solutions, including business intelligence and data analysis tools. We believe that traditional business intelligence tools often fail to provide timely and critical insights to business professionals due to inflexible data architecture, lack of broad usability and substantial implementation time and costs. As a result of the limitations of traditional business intelligence tools, many business users have turned to spreadsheets to help them perform data analysis. Business users have adopted spreadsheets for many applications due to their wide availability; however, these general productivity tools were not specifically designed to facilitate interactivity, collaboration, aggregation or analysis of data for decision making.

Trends Driving Adoption of Business Intelligence and Data Analytics Solutions

The use and importance of business intelligence and data analytics software within organizations of all sizes has increased significantly for several reasons, including:

Exponential Growth in Data Available for Analysis. Over the last two decades, organizations have made significant investments in automating business processes with software applications that generate substantial amounts of data which must be manipulated, analyzed and made accessible to be useful to decision makers. However, this data is often stored in different formats making it challenging to efficiently analyze the data and gain insight from it without using powerful data analytics solutions.

Disparate Data Sources. In today’s highly competitive marketplace, companies are expanding operations through geographic diversification, acquisitions and partnerships. The frequency of these strategic activities can result in a complex web of infrastructure and software systems within an organization. In addition, companies are more closely integrating their systems with those of their customers, partners and suppliers and adopting new software applications to improve business efficiency. As a result, large amounts of data are stored in various repositories across an extended network creating significant data aggregation challenges. Organizations often deploy a number of tools, including sophisticated data integration software, purpose-built data warehouses and business intelligence systems, to efficiently and reliably aggregate, synchronize and analyze this disparate business data.

Decentralized Decision-Making. We believe that many organizations are shifting towards decentralized decision-making in order to more efficiently respond to changing industry trends and competitive threats. This shift has created the need for data analysis tools that support employees at all levels of the organization as they assume more responsibility for making critical business decisions. Additionally, we believe that increases in the power and performance of mobile networks and devices will drive demand for mobile access to business data. The widespread use of simple yet robust personal software applications has driven demand from business users for intuitive analytical tools to make faster and better decisions.

The Empowered Consumer. Today’s business users are also consumers. At home they are able to read books on an eReader, watch movies on a tablet, and chat and collaborate with friends via social media sites. They are able to access the information they want, how they want it, when they want it. But at work they find that web sites are blocked, their selection of devices is restricted, and email clients groan under security overhead. As consumers, these users are empowered, but in the corporate setting, they are not. We believe that this daily cognitive dissonance is causing a fundamental shift in corporate computing as business users are demanding more flexibility, and IT is evolving to become a supportive partner with these empowered users.

Traditional Software Tools are Inadequate

Although there has been increasing adoption of business intelligence and data analytics tools, we believe that most of these traditional tools are inadequate to meet the needs of users and face the following limitations:

Analysis Tools Don’t Serve Business Users. Most traditional business intelligence tools were developed specifically for data analysts and other quantitative professionals and are driven and deployed in a top-down approach. These systems require sophisticated programming skills to construct or modify predefined, inflexible data sets, known as “data cubes.” These tools are used to produce static reports which the business user cannot easily modify or explore in an interactive manner. A typical business user does not possess the skills or authority needed to modify the underlying data cube and therefore must engage their IT departments to reconfigure the analysis to produce the requested information between each decision cycle. As a result, business users often do not have access to critical data in a timely manner and may miss important insights and opportunities.

Highly Inflexible Solutions are Difficult to Implement and Maintain. Traditional business intelligence solutions require the integration of large volumes of data stored across an organization and its partners and the development of a pre-defined summarization of the data (or data warehouse) to support static query and reporting tools. These tasks can be time-consuming and complex and often require significant professional services support to complete. In addition, traditional business intelligence solutions can be difficult to update and require substantial investments to refresh the underlying data.

Slow Time-to-Value. Traditional business intelligence solutions have become complex product “stacks” weaving together multiple disparate products into a single “solution.” But due to the inherent complexities and overhead of these complex stacks, we believe that the typical business intelligence implementation takes twelve to eighteen months, or more, to implement. By that time the business, and the business user requirements, may have evolved or changed, resulting in an extensive queue of user requests to update and revise reports or dashboards. Even simple changes can take weeks or months to implement, resulting in a solution which we believe is always a few steps behind the business and never fully addresses the business user’s requirements.

Substantial Total-Cost-of-Ownership. Organizations incur significant hardware, software and professional services costs to deploy and maintain traditional business intelligence solutions. We estimate that the cost of development for business intelligence and data warehouse applications is about three to five times the cost of the software. These initial and ongoing costs result in a substantial total-cost-of-ownership for many traditional business intelligence applications. Most providers of traditional business intelligence tools rely upon professional services revenue for a large portion of their total revenue, and thus have little incentive to migrate to a more customer friendly license-based model or to solutions that are simple to install and easy-to-use.

Spreadsheets Not Suited for Data Analysis and Lack Reliability. Spreadsheets have been widely adopted by business users for data analysis because they are readily available. However, spreadsheets are general purpose business productivity tools designed for data input and calculation. The performance of spreadsheets declines when analyzing large data sets or performing real-time, dynamic calculations. Spreadsheets are often shared and edited by numerous parties, resulting in multiple versions of similar material. This lack of version control causes inconsistencies in analysis, an inability to audit workflows and significant data reliability challenges. Furthermore, spreadsheets lack sophisticated data security features and can cause a number of data security challenges given they can be easily shared via email or detachable storage drives.

Our Solution

QlikView is leading a shift in the business intelligence market towards user-driven solutions. We call this solution Business Discovery, and we believe it is the next generation of business intelligence, bridging the gap between traditional business intelligence solutions and standalone office productivity solutions. The QlikView Business Discovery platform is designed to enable business users across organizations of all sizes to make faster and better decisions. The key differentiators of our solution include:

All Business Users. Instead of just a few people involved in insight creation, QlikView empowers all business users with sophisticated analytic capabilities delivered through an easy-to-use, intuitive user interface. Unlike traditional business intelligence tools, which typically require advanced programming by IT professionals to create static data reports, QlikView allows the business user to search associatively and define visual charts through simple point-and-click technology. Our user interface extends insight creation to edges of the organization user and drives QlikView usage and adoption.

Zero Wait Analysis. QlikView provides customers with the tools to make faster, better decisions that help improve business performance. Our deployment time significantly shortens time-to-value for our customers. In addition, after the initial installation the customer’s analysis can be rapidly updated as underlying data evolves and analytic requirements change. Furthermore, QlikView’s in-memory associative search technology makes calculations in real time enabling business users to intuitively interrogate and analyze data, which reduces decision cycles.

Mobility. We were one of the first business intelligence vendors with a mobile offering, and we aim to continue to be on the forefront of the mobile business intelligence market. Tablets and other large-form-factor mobile devices are now driving significant growth in mobile business intelligence, expanding the use cases and user communities. Unlike traditional business intelligence solutions, QlikView provides an intuitive user-driven interface and an application infrastructure that is tailor-made to take advantage of the opportunity of a truly mobile, well-informed workforce.

Lower Total-Cost-of-Ownership Yields Higher ROI. We believe that QlikView has a lower total cost of ownership than traditional business intelligence tools. These savings are driven by reduced expenditures across hardware, software and services from implementation through ongoing maintenance and support. Traditional business intelligence tools are typically comprised of a number of disparate software components. QlikView is a single, cohesive product that facilitates many types of analysis, whether dashboards, analytic applications or reports, in a single user interface with a common look and feel. QlikView can be implemented in a self-service manner and runs independently with limited IT support and without extensive infrastructure.

Highly Scalable In-Memory Architecture Leverages Hardware Advances. QlikView’s in-memory associative technology benefits from two important computer hardware trends: 64-bit computing, which increases the amount of memory available on computers, and multi-core central processing units, or CPUs, which allow for parallel processing of complex calculations. Because of these capabilities, QlikView is able to store data in memory and perform real-time calculations on a massive volume of data from disparate sources. It is our expectation that the amount of available memory and number of CPU cores and processing speed will continue to increase in the future. These expected improvements will drive QlikView’s future performance with minimal incremental investment because we perform calculations in memory and on multiple cores in parallel. Our platform integrates with nearly all data sources and can scale from a single user to enterprise deployments without requiring significant additional infrastructure.

An App-Like Model. QlikView is designed to be the easiest and fastest business intelligence platform on which business users can develop analytic applications. We provide a powerful, easy-to-use business intelligence platform that does not include any purpose-specific applications when installed out-of-the-box. We believe that each of our customers’ business challenges are highly unique and change rapidly. Therefore, our customers are best positioned to create analytical applications that meet their individual needs, and they require a flexible platform that empowers them to address their challenges. Additionally, we license our platform to partners, such as independent software vendors and systems integrators, to create a wide variety of applications. We have aligned with partners who have domain specific knowledge and who will use such knowledge to build and support purpose-specific analytic applications that they can license directly to a user.

Remixability and Reassembly. Traditional business intelligence solutions require IT or specialized users to get involved whenever new questions arise. In contrast, QlikView makes it easy for business users to remix and reassemble data in new views and create new visualizations for deeper understanding.

Our Business Model

To complement QlikView, we have developed a differentiated business model that has the following attributes:

Broad User Focus. We seek to market and sell directly to the business user by providing an intuitive software platform that can be installed and used with minimal training. We believe that the ease by which business users can evaluate and benefit from our platform substantially expands our addressable market by allowing us to target a wide range of users, generate incremental business from existing customers and expand our footprint within their organizations. Unlike most existing business intelligence tools, QlikView is purpose-built for business users and does not require substantial IT support to install, integrate and maintain.

Low Risk Rapid Product Adoption. To facilitate adoption of our platform, we offer a downloadable, easy-to-install, full-featured version of QlikView for individual use free-of-charge. We allow our customers to purchase licenses in the way that best meets their needs, including on an individual, workgroup, departmental or enterprise wide basis. This provides the flexibility organizations desire when evaluating software purchases. When a customer decides to make a purchase, we offer a 30-day, money-back guarantee to further encourage rapid adoption of QlikView. These measures significantly reduce customer trial risk and provide a needed alternative to costly, all-or-nothing, enterprise-wide deployment requirements.

“Land and Expand” Customer Penetration. We seek to initially “land” within the organization of a new customer by solving a business need of specific business users or departments. After demonstrating the value of our solution to those initial adopters, we work to “expand” the use of our solution across the organization by targeting other business units, geographies and use cases. Our customer penetration strategy is focused on creating a loyal user base that promotes adoption through tangible results and powerful, word-of-mouth marketing which facilitate incremental sales.

Globally Diversified Distribution Model. We seek to maximize the reach of the QlikView platform by employing a multi-pronged sales approach that leverages a direct sales force and partner network which includes resellers, OEM relationships and systems integrators. We typically enter new markets through partnerships and reseller agreements to minimize cost and risk while we assess demand in the new market. For example, we successfully grew our initial sales in France and the United Kingdom without maintaining a local direct sales office and plan to use this strategy to target additional international regions. As of December 31, 2010, we had distribution capabilities in over 100 countries and a network of over 1,200 channel partners worldwide to help generate demand for QlikView.

Community-Based Marketing and Support. We have established QlikCommunity, our user community, to augment our development, marketing and support efforts. This community of over 43,000 registered users as of December 31, 2010 promotes the use of our software within their organizations as well as to other organizations. We utilize the QlikCommunity extensively to provide low-cost user and developer support and valuable insights used by our research and development team for product development. This passionate, user-driven culture and collaboration begins within our company and extends out to broader communities within our customers’ organizations, further driving the QlikView brand and quality.

Our Growth Strategy

We intend to make QlikView the primary platform on which business users, in companies of all sizes, make critical business decisions. The key elements of our growth strategy include:

Increase Our Global Market Penetration. We intend to expand our presence in targeted geographies by growing our direct sales force and global partner network. We began our operations in Sweden, have established a substantial foothold in Western Europe and continue to expand globally. We intend to increase our presence in North America by expanding our direct sales force and growing our indirect channel in the region. We also seek to enter new international markets by establishing distribution partnerships to drive sales. We are leveraging our prior experience in Europe with distribution partners and master resellers to further penetrate international regions, such as the U.S., Japan, Australia, China, Russia and Brazil.

Further Penetrate Our Existing Customer Base. We intend to increase penetration of existing customers by capitalizing on current users’ satisfaction to promote QlikView to other users and departments within their organizations. Of our approximately 18,000 customers as of December 31, 2010, approximately 25% have been working with the QlikView platform for less than 12 months. We believe a substantial opportunity exists to increase our sales to these customers. Historically, we have migrated new customers from single project and departmental deployments to multi-department deployments by building on the satisfaction and benefits that our customers experience using our platform.

Extend Our Software Platform to Provide New Business Solutions. We plan to enhance our current platform by adding new functionality that extends our analytics, visualization and search capabilities to broader use cases. Today, business intelligence is primarily used to solve internally focused decision-making by data analysts and other quantitative professionals. We believe that due to our unique capabilities, QlikView can be extended to adjacent areas where data-driven decisions are critical, including website navigation, content search and information management, external data communication, product configuration and e-commerce applications. Over time, we believe a variety of data-intensive functions within organizations could be enhanced and made more efficient by utilizing QlikView.

Expand Our OEM Alliances and Strategic Relationships. We believe we have a significant opportunity to expand the use of QlikView through our OEM relationships, which accounted for approximately 8% of our sales in 2010, as well as through other distribution relationships. We have an ongoing effort to increase our number of OEM alliances with other independent software vendors that license our technology to embed within and enhance their solutions. In addition, we seek to expand our strategic reseller agreements and relationships with systems integrators and consultants and to use this channel to generate additional inbound customer prospects.

Enhance Adoption of QlikView through our Robust Mobile Offering. In addition to traditional desktop usage, we enable customers’ use of QlikView from any location via a number of mobile devices. In May 2009, we began offering a native iOS version of QlikView for the Apple iPhone and in April 2010, we began offering the same for the iPad. In late 2010, we began to develop a HTML5 based client that runs on webkit based mobile web browsers and supports full touch-based interactivity. Our initial version, which supports Apple’s iPad shipped in March 2011, and we believe this strategy will allow us to support all mobile devices that offer webkit based mobile browser support. We believe the interactive capabilities of QlikView mobile client will help establish us as a market leader in the emerging mobile business intelligence space and enhance adoption of QlikView on the desktop as additional users experience the capabilities and benefits of our solution.

Our Products

Our QlikView product is designed to allow deployments to scale from the single user to thousands of users. The following diagram shows the deployment progression for QlikView:

Single User Deployment

QlikView Local Client is designed to provide business users with a simple and efficient way to build analytic applications to solve critical business challenges. QlikView Local Client is a Windows application that is installed on the user’s computer. QlikView Local Client allows the user to load disparate data sources such as databases, flat files or web services into memory. Users can create a full array of user interface objects such as charts, graphs, tables and listboxes and analyze and visualize the data that is stored in memory. In addition, any user interface elements can be grouped together into a static report suitable for printing or emailing. These analytic applications are valuable on a standalone basis but gain their real value when shared with others in the organization.

We offer QlikView Local Client as a free download with full capabilities to develop analyses, but with the restriction that users can only use analyses they have built themselves. This is referred to as a Personal Use License and allows users to connect to any underlying data source, load data, build user interfaces and conduct interactive analyses of their data. The Personal Use License limits the use of the QlikView files to the person who created it. To share the analysis with another user, each user must have a QlikView license, rather than a Personal Use License. The Personal Use License provides a way for individuals to learn and gain value from QlikView and also generates leads for our sales organization.

Small Workgroup Deployment

A small workgroup deployment involves the use of multiple QlikView Local Clients on standalone client machines without a central server. In order to share QlikView data and analysis created by others in the workgroup, each user must have an individual license. Because all data and analysis is contained within a QlikView file, each licensed user may share, whether by email, on a portal or on a shared drive, the QlikView file. This deployment approach is typically favored by organizations with small user populations and/or poor network connectivity.

Departmental and Enterprise Deployments

Departmental and enterprise deployments utilize a server to provide a central repository for all QlikView analysis. The QlikView Server component supports authentication and security models to ensure appropriate user access and simultaneous access to analyses by large user groups. We designed QlikView Server to maximize the use of the processing power of standard multi-core servers by spreading calculations over all available CPU cores. The QlikView Server can be grouped across more than one physical server into clusters to provide fault tolerance and additional scale.

Server based deployments scale from small user groups (less than 25) to enterprise-wide use (tens of thousands of users). We offer the QlikView Server at two license levels: Small Business Edition and Enterprise Edition. Small Business Edition is limited to 25 users and is suitable only for small and midsize deployments. The Enterprise Edition has no user limits and includes capabilities designed for larger and more technically complex implementations.

To manage large deployments of QlikView, we offer our QlikView Publisher component which is an administrative interface for maintaining QlikView analyses. QlikView Publisher allows users to reload data in a QlikView analysis on a periodic basis to ensure that the most current data is available. QlikView Publisher also connects to directory servers within organizations and applies user security rules to a QlikView analysis to ensure appropriate user access. Finally, QlikView Publisher can alert end users to changes to a QlikView file and facilitate distribution via email or a web based interface called AccessPoint. The QlikView Publisher can be deployed across one or more physical servers to provide the scale needed for large QlikView deployments. QlikView Publisher is licensed on a per server basis and includes a separately licensable option for PDF report distribution capabilities. For large enterprise deployments, multiple QlikView Servers and QlikView Publishers can be clustered to provide load balancing and fail over capabilities.

Access to the QlikView Server is governed by a Client Access License (“CAL”) licensing model. The most common QlikView Server license type is a Named User CAL. In addition to access to the QlikView Server there are separately licensable options for real-time data streaming capabilities and test and development servers. QlikView also offers separately licensable options for a connector to SAP and Salesforce.com.

Our Technology

QlikView’s primary architectural principles are to provide end user simplicity and rapid deployment. In developing our solution, we endeavor to obscure the underlying technical complexity from the user while providing powerful easy-to-use functionality.

Superior End User Experience

QlikView is designed to mirror the fluid, associative nature of human thought. We believe people process information in non-hierarchical ways when making decisions. Faced with a decision, each person uses a different path to reach a conclusion. We designed QlikView to support this type of decision-making by allowing users to explore data according to their own thought processes, seeing updated calculations and relationships with each QlikView interaction.

We call this flexible model of interaction “associative search.” Associative search is a non-hierarchical model of interacting with interrelated data elements. It allows users to select arbitrary groups of data elements and see how these selections affect the remaining data elements. In QlikView, the user’s selections are shown in green, data elements related to these selections are shown in white, and data elements not related to these selections are shown in gray. The user’s current selections apply to all the data in QlikView and affect every calculated value. Thus, with every interaction, users see the relationship between data and also the effect their selection has on calculations that they are tracking. Importantly, information is never hidden from the user. All data is always shown to the user, including information not related to the user selection. This can lead a user to see unexpected insights from otherwise excluded data. Finally, all user interactions and data calculations are performed in real time. Because of the rapid response time and ease of use, users can click frequently through data and analysis. Users take advantage of this speed to “surf” the data and identify relationships that they may otherwise miss in competing products.

Traditional business intelligence query tools filter data that is not part of the current query, hiding data from the user and potentially omitting valuable information which did not meet the initial parameters of the question. Typically, the queries that underlie these tools take many minutes or even hours to run. This creates a high cost of investigation and may cause users to avoid running multiple queries. In addition, to improve performance, traditional tools often require reports to be run in batches and thus be pre-defined ahead of time.

Fast Deployment

QlikView’s architecture reduces the cycle time between data collection and deployment of analysis to the end user to a few weeks and sometimes to as little as a few days. By moving all data in-memory, QlikView does not require the use of data warehouses for high performance analyses which shortens the time to access data. QlikView does not require disk-based cubes since it performs all calculations in real time as the user explores a data set. This approach allows the user to interactively analyze a data set and easily modify the scope of an analysis. In addition, in many cases, end users can build the required analyses themselves. The QlikView architecture facilitates the development of all types of analysis, including dashboards, analytic applications or reports, on a single platform with a common user interface. QlikView is often deployed with limited IT intervention enabling IT staff to focus on data integration and data quality challenges which is where they can be most valuable.

Traditional business intelligence tools typically require long and complicated deployments for several reasons. In traditional deployments, large volumes of data used for decision-making must be moved into query-only data repositories such as data warehouses to accommodate the heavy query loads that traditional tools make on operational systems. Traditional tools store analyses on disk in pre-calculated cubes to improve perceived metric calculation performance. These disk-based cubes are difficult and time-consuming to build and maintain and require the scope of analysis to be decided ahead of time. Thus, typical deployments of traditional business intelligence tools require an extended requirements gathering phase during which IT staff work with business users in an attempt to document and lock-down the scope of analysis in advance. Traditional business intelligence tools have many end user tools for viewing analyses. Once the data is organized, there is a long process of selecting and deploying the appropriate end user tool. Finally, due to product complexity, traditional tools must be managed and governed by resource constrained IT departments, rather than by business users. Most traditional deployments require over a year to implement fully, with changes to the scope of a project extending the time to value.

Technology Foundations

Associative search has two key technological foundations: all data is held in computer memory (RAM), and all calculations are performed in real time. Two important computing trends have supported these architectural decisions. The first trend is the shift from 32-bit computing to 64-bit computing, which has exponentially raised the amount of available RAM per computer. It is currently possible to purchase servers with as much as 512 gigabytes of RAM, whereas as recently as 2005, most servers had four gigabytes of RAM. This increase in available memory has made it practical to move data storage from disk directly into RAM. The second trend is the increasing pervasiveness of multi-core CPUs. In 2005, most servers had single-core CPUs. Today, commonly available servers can have as many as 48 cores across eight CPUs. For applications that have been designed to run calculations in parallel, this shift has provided a large increase in processing power. These high capacity servers are readily available for purchase, even online via credit card, for less than $50,000. Even quite recently this level of computing power would require a custom built machine costing hundreds of thousands or even millions of dollars.

QlikView’s in-memory architecture allows it to manipulate large amounts of data, while giving users a high level of interactivity. QlikView compresses data as it is brought into memory, and this enables it to store data in-memory more efficiently than it would be stored on disk in a traditional relational database. As data is brought into memory, QlikView also maps the linkages between data elements to help facilitate visualization of data element associations. In more recent versions of QlikView, data can be streamed directly into memory from source applications, providing a mechanism for updating the data in-memory without reloading.

QlikView’s ability to perform real-time calculations allows it to handle the calculation of complex measures and metrics quickly. QlikView is designed to spread the calculation load across all available CPU cores and to manage this workload across many concurrent users. In addition, our platform can cache results across users so that the most commonly used calculations are performed the least number of times.

QlikCommunity

We have a loyal base of users on our online community website, QlikCommunity, which is comprised of over 43,000 registered users as of December 31, 2010. Our QlikCommunity website was relaunched in May 2009, and during the year ended December 31, 2010, we averaged approximately 60 new user registrations each day. QlikCommunity provides our registered users with a low-cost, user-friendly product support resource, which includes:

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discussion forums to share their QlikView experiences and to find answers to questions about the product and its features

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user groups based on location, industry and job function

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blogs written by our employees

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user-generated content, including best practices, how-to’s, documentation and other material.

In addition, QlikCommunity provides us with a loyal network of practitioners who promote the usage of our software and provide support to users trying to solve technical problems. QlikCommunity also serves as a valuable feedback loop through which our product development team gains insights about new features and functionalities that help guide our future product development. QlikCommunity users also provide us with their contact information when they register as a member, and we effectively target these users as a pool of self-selecting, low-cost, qualified sales leads.

Research and Development

Our research and development (“R&D”) organization is responsible for the design, development, testing and support of our software. Our current research and development efforts are focused on new releases of existing products as well as new products and modules.

As of December 31, 2010, we had 96 people in our R&D organization. Our entire R&D organization is located in Lund, Sweden. The core members of our R&D team have been with our company since as early as 1996. We believe that the tenure of our core development organization provide us with a competitive advantage. We use an agile philosophy in our development process which encourages broad participation in design and testing and rapid prototyping. Our development, testing and quality assurance processes use automated testing extensively and are designed in alignment with Capability Maturity Model Integration (“CMMI”), an industry R&D process improvement approach.

We aim to release major feature releases of QlikView every 12 to 18 months, with service releases every two to four months between major releases. Some new product capabilities such as mobile technologies and data connectors that can be developed independently are released more frequently.

We work closely with our customers in developing our products and have designed a flexible product development process that is responsive to customer feedback that we receive throughout the process. Planning for each major release begins with a requirements gathering meeting called a Reference Group which gathers input from our customer-facing implementation consultants in each of our markets. As the product is developed, specific customers and partners are identified to provide detailed feedback on product design. Then, a broad set of customers and partners are involved in beta testing major releases of QlikView, which typically occurs for several months prior to general availability. In addition to local requirements, we gather all direct customer input from QlikCommunity, our community website. From the Reference Group we consolidate and prioritize all customer requirements. These requirements form the input for the Design Group which comprises core members from R&D and our Product Marketing team. The Design Group segments requirements into the product release cycle and assesses the technical feasibility of all requests.

Within our operations, we are extensive users of our own product. We install, upgrade and use our product internally in a pre-release and beta state before allowing it to be made generally available. Consequently, this process allows us to identify and resolve many deployment issues prior to making the product available to customers.

Innovation is a critical factor in the success of QlikView, and identifying and incubating innovation is built into our R&D process. We have recently added a QlikView Labs department to consolidate and manage innovative uses of QlikView and new core technologies. We invest time and money in identifying and nurturing new product concepts with the intention of incorporating successful ideas into the product as new product modules or as entirely new products.

Marketing and Sales

We market and sell our products and services through our direct sales force and an indirect sales channel comprised of a global partner network. Our direct sales force consists of professional sales people who typically have several years of experience selling enterprise software. Our global partner network brings key technological and industry expertise that we utilize to help us reach customer organizations around the world. These indirect sales channels often aid us in shortening the sales cycles we typically face with prospective customers.

Our global partner network includes master resellers, elite resellers and resellers. These partners are authorized to sell licenses and to implement and provide first line support for our products. A master reseller is generally appointed to extend geographic sales into a territory where we have no direct sales presence. Designation of elite reseller versus reseller is driven by the amount of sales volume that they derive from the sale of our product. Additionally we work with system integrators and other technological consulting firms who provide complementary skills and expertise in a certain industry or region.

Our global partner network also includes OEM partners who use QlikView technology as a bundled or add-on feature in their products and services. Typically OEM partners include software companies, SaaS vendors and information providers. More broadly, this category applies to any organization seeking to leverage QlikView to power the analytics in an existing or new product or in a service offering.

We support our global partner network through a program that provides a structured framework to effectively recruit, enable and support partners who sell and deliver complementary QlikView solutions. Our team provides a complete lifecycle of support to partners, based on three fundamental principles:

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enable partners through technical support, education, training and certification

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market with and for partners through branding, awareness, customer marketing and lead generation programs

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sell QlikView and “Powered by QlikView” products with effective sales tools and sales support.

As of December 31, 2010, our global partner network was comprised of more than 1,200 partners in over 100 countries. No individual partner represented more than 3% of our revenues in the fiscal years ended December 31, 2010, 2009 or 2008.

We focus our marketing efforts on increasing brand awareness, communicating product advantages and generating qualified leads for our sales force and channel partners. We rely on a variety of marketing vehicles, including trade shows, advertising, public relations, industry research, our website and collaborative relationships with technology vendors. In addition, we work closely with a number of our global partners on co-marketing and lead-generation activities in an effort to broaden our marketing reach.

Maintenance and Services

Maintenance and Support. Our customers generally receive one year of software maintenance and support as part of their initial purchase of our products and have the option annually to renew their maintenance agreements. These annual maintenance agreements provide customers the right to receive unspecified software updates, maintenance releases and patches, and unlimited access to our support services. We engage third parties to provide first-line support for our product. We work closely with these third parties to help ensure that they have the necessary skills and product knowledge to assist our customers with installation, maintenance and other requirements. Our internal support personnel are based in our offices in Lund, Sweden; Raleigh, North Carolina; Dusseldorf, Germany; and Sydney, Australia; and they work with our third party partners to handle support issues that may arise.

Services. Our revenue model is license driven with minimal professional services required to install and configure our software. We believe that this enables our customers to achieve rapid time-to-value. While the vast majority of implementation projects are conducted by our partners, we have also established an expert services department to support customers and partners with more in-depth technical know-how and best practices about our product including implementation, scripting, user interface design, application development and security management. Training is given either in-person or online. Typically, in-person training courses are billed on a per-person, per-class basis. We have both standard packages as well as customized trainings. We also utilize and promote QlikCommunity as a supplement support resource for our customers.

Customers

As of December 31, 2010, we had approximately 18,000 active customers in over 100 countries. Our customers conduct their respective businesses in numerous industry verticals, including consumer packaged goods, financial services, pharmaceuticals, retail, manufacturing, technology and healthcare. We do not believe our business is substantially dependent on any particular customer as no customer represented more than 2% of our revenue in 2010, 2009 or 2008. Our target markets are not confined to certain industries and geographies as we are focused on providing a solution that generally meets the needs of business users.

Brand and Intellectual Property

Our intellectual property is an essential element of our business. We own registered trademarks for the “Qlik” and “QlikView” name. We rely on a combination of copyright, patent, trademark, trade dress and trade secrecy laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights both domestically and abroad. These laws, procedures and restrictions provide only limited protection. As of December 31, 2010, we had three issued U.S. patents and had a pending application for a fourth U.S. patent. In addition, we had 19 issued and six pending foreign patents. Any future patents issued to us may be challenged, invalidated or circumvented. Any patents that might be issued in the future, with respect to pending or future patent applications, may not provide sufficiently broad protection or may not prove to be enforceable in actions against alleged infringers. We endeavor to enter into agreements with our employees and contractors and with parties with whom we do business in order to limit access to and disclosure of our proprietary information.

We cannot be certain that the steps we have taken will prevent unauthorized use or reverse engineering of our technology. Moreover, others may independently develop technologies that are competitive with ours or that infringe our intellectual property. The enforcement of our intellectual property rights also depends on any legal actions against these infringers being successful, but these actions may not be successful, even when our rights have been infringed.

Furthermore, effective patent, trademark, trade dress, copyright and trade secret protection may not be available in every country in which our products are offered. In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and still evolving.

From time to time, we may encounter disputes over rights and obligations concerning intellectual property. Although we believe that our product offerings do not infringe the intellectual property rights of any third party, we cannot be certain that we will prevail in any intellectual property dispute. If we do not prevail in these disputes, we may lose some or all of our intellectual property protection, be enjoined from further sales of products determined to infringe the rights of others and/or be forced to pay substantial royalties to a third party, any of which could harm our business, financial condition and results of operations.

Competition

Our technology platform and differentiated business model help us to compete in the highly competitive business intelligence market. We face competition from many companies that are offering, or may soon offer, products that compete with our products.

To date, we have primarily faced competitors in several broad categories, including business intelligence software, analytical processes, query tools, web-based reporting tools and report delivery technology. Independent competitors that are primarily focused on business intelligence products include, among others, MicroStrategy and the SAS Institute. We also compete with large software corporations, including suppliers of enterprise resource planning software, that provide one or more capabilities competitive with our products, such as IBM, Microsoft, Oracle and SAP AG. We believe we generally compete favorably with respect to these competitors; however, some of our competitors and potential competitors have advantages over us, such as:

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longer operating histories

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significantly greater financial, technical, marketing or other resources

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stronger brand and business user recognition

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broader global distribution and presence.

Current and future competitors may also have greater resources to make strategic acquisitions. By doing so, these competitors may increase their ability to meet the needs of our potential customers. Our current or prospective indirect channel partners may establish cooperative relationships with our current or future competitors. These relationships may limit our ability to sell our products through specific distribution channels. Accordingly, new competitors or alliances among current and future competitors may emerge and rapidly gain significant market share. These developments could limit our ability to obtain revenues from new customers and to maintain technical support revenues from our installed customer base.

See Item 1A of this Annual Report on Form 10-K entitled “Risk Factors” for further discussion regarding our competition.

Culture and Employees

As a global company, we have 780 employees as of December 31, 2010, of which 199 were employed in the U.S. and 581 were employed outside the U.S. We believe that having a strong company culture and set of values is critical to our success. Our corporate culture provides us with a competitive advantage by supporting our ability to keep our market offering consistent despite a globally diverse employee base. To communicate and reinforce our culture, we have a set of corporate values which provide a framework for guiding employees in implementation of our business model without direct managerial control. Our values are:

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challenge the conventional

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be thorough but keep it simple

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open and straightforward

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take responsibility

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teamwork yields the best results.

Our values are taught and reinforced from the moment new employees join our company. Shortly after being hired, all employees attend QlikAcademy, a week-long training session in Lund, Sweden, to learn about our product, our sales model and our cultural values. Our values form the fabric of our work ethic, and we believe that they enable us to quickly recruit and properly manage our highly talented employees. Our culture encourages the iteration of ideas to address complex technical challenges. In addition, we embrace individual thinking and creativity. Despite our growth, we constantly seek to maintain a small-company feel that promotes interaction and the exchange of ideas among employees. We try to minimize company hierarchy to facilitate meaningful communication among employees at all levels and across all departments. This openness extends to our partners and customers, as well as allowing us to establish strong relationships that contribute to our growth.

Every year since 2000 we have hosted an annual QlikTech summit where we bring together all our employees in one location to build cross-border relationships and to facilitate communications. During the summit we update employees on our progress, provide training around new initiatives, host presentations by industry speakers and key customers and allow open interaction between employees from around the world. Our summit is a critical mechanism for promoting consistent and efficient execution of the year’s strategic plan. Having the summit at a single time and in a single location provides our globally distributed organization with an opportunity to share ideas and best practices. We believe that the summit is one of the key elements in maintaining a strong company culture among our employees.

We consider our current relationship with our employees to be good. We are not a party to a collective bargaining agreement with any of our employees.

Company Information and Website

We file annual, quarterly and current reports, proxy statements and other documents with the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at Station Place, 100 F Street, N.E., Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.

In addition, our company website can be found on the internet at http://www.qlikview.com. The website contains information about us and our operations. Copies of each of our filings with the SEC on Form 10-K, Form 10-Q and Form 8-K and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports, access http://investor.qlikview.com and click on “Financial Information.” References to our company website address in this report are intended to be inactive textual references only, and none of the information contained on our website is part of this report or incorporated in this report by reference.

ITEM 1A.		RISK FACTORS

Our business is subject to numerous risks. You should carefully consider the risks described below together with the other information set forth in this Annual Report on Form 10-K and other documents we file with the SEC, which could materially affect our business, financial condition, and future results. The risks described below are not the only risks facing our company. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results.

We have limited experience in targeting a global marketplace and compete in a rapidly evolving industry which makes our future operating results difficult to predict.

We have limited experience in targeting the global business intelligence marketplace. In addition, we have a limited operating history in an industry characterized by rapid technological innovation, changing customer needs, evolving industry standards and frequent introductions of new products, enhancements and services. Any of these factors can render our existing software platform and services obsolete or unmarketable. We believe that our future success will depend in large part on our ability:

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to support current and future releases of popular hardware, operating systems, computer programming languages, databases and software applications

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to develop new products that achieve market acceptance in a timely manner

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to meet an expanding range of customer requirements.

As we encounter increasing competitive pressures, we will likely be required to modify, enhance, reposition or introduce new products and service offerings. We may not be successful in doing so in a timely, cost-effective and appropriately responsive manner, or at all. All of these factors make it difficult to predict our future operating results which may impair our ability to manage our business.

We may experience quarterly fluctuations in our operating results due to a number of factors which make our future results difficult to predict and could cause our operating results to fall below expectations or our guidance.

Our operating results may fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Our past results should not be relied on as an indication of our future performance. If our revenue or operating results fall below the expectations of investors or securities analysts or below any guidance we may provide to the market, the price of our common stock could decline substantially.

Our operating results have varied in the past. In addition to other risk factors listed in this “Risk Factors” section, factors that may affect our quarterly operating results, business and financial condition include the following:

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demand for our software platform and services and the size and timing of orders

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market acceptance of our current and future products

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a slowdown in spending on information technology and software by our current and/or prospective customers

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sales cycles and performance of our indirect channel partners and original equipment manufacturers (known as OEMs)

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budgeting cycles of our customers

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the management, performance and expansion of our international operations

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the rate of renewals of our maintenance agreements

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changes in the competitive dynamics of our markets

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our ability to control costs, including our operating expenses

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customers delaying purchasing decisions in anticipation of new products or product enhancements by us or our competitors

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the outcome or publicity surrounding any pending or threatened lawsuits

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the timing of recognizing revenue in any given quarter as a result of revenue recognition rules

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an increase in the rate of product returns

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foreign currency exchange rate fluctuations

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failure to successfully manage any acquisitions

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general economic and political conditions in our domestic and international markets.

In addition, we may in the future experience fluctuations in our gross and operating margins due to changes in the mix of our direct and indirect sales, domestic and international revenues, and license and professional services revenues.

We may implement changes to our license pricing structure for all of our products including increased prices and modified licensing parameters. If these changes are not accepted by our current or future customers, our business, operating results and financial condition could be harmed.

Based upon all of the factors described above, we have a limited ability to forecast the amount and mix of future revenues and expenses, and it is likely that at some time our operating results will fall below our estimates or the expectations of public market analysts and investors.

We depend on revenue from a single product platform.

We are dependent on a single product platform, QlikView. Our business would be harmed by a decline in demand for, or in the price of, our software platform as a result of, among other factors:

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any change in our pricing model

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increased competition

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support, research and development or other expenditures undertaken in attempts, whether or not successful, to develop new products

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maturation in the markets for our products.

Our financial results would suffer if the market for business intelligence software does not continue to grow or if we are unable to further penetrate this market.

Nearly all of our revenues to date have come from sales of business intelligence software and related maintenance services. We expect these sales to account for substantially all of our revenues for the foreseeable future. Although demand for business intelligence software has grown in recent years, the market for business intelligence software applications is still evolving. We cannot be sure that this market will continue to grow or, even if it does grow, that customers will purchase our software platform or services. We have spent, and intend to keep spending, considerable resources to educate potential customers about business intelligence software in general and our software platform in particular. However, we cannot be sure that these expenditures will help our software platform achieve any additional market acceptance or enable us to attract new customers or new users at existing customers. A reduction in the demand for our services and software platform could be caused by, among other things, lack of customer acceptance, weakening economic conditions, competing technologies and services or decreases in software spending. If the market and our market share fail to grow or grow more slowly than we currently expect, our business, operating results and financial condition would be harmed.

We use indirect channel partners and if we are unable to maintain successful relationships with them, our business, operating results and financial condition could be harmed.

In addition to our direct sales force, we use strategic indirect channel partners, such as distribution partners, value-added resellers, system integrators and OEMs to license and support our software platform. For the year ended December 31, 2010, transactions by indirect channel partners accounted for more than 50% of our total product licenses and first year maintenance billings.

Our channel partners may offer customers the products of several different companies, including products that compete with ours. Our channel partners generally do not have an exclusive relationship with us; thus, we cannot be certain that they will prioritize or provide adequate resources for selling our products. Divergence in strategy or contract defaults by any of these channel partners may harm our ability to develop, market, sell or support our software platform. In addition, establishing and retaining qualified indirect sales channel partners and training them in our software platform and services require significant time and resources. In order to develop and expand our distribution channel, we must continue to scale and improve our processes and procedures that support our channel, including investment in systems and training. These processes and procedures may become increasingly complex and difficult to manage as we grow our organization.

Our ability to achieve revenue growth in the future will depend in part on our success in maintaining successful relationships with our channel partners. There can be no assurance that our channel partners will continue to cooperate with us when our distribution agreements expire or are up for renewal. If we are unable to maintain our relationships with these channel partners, our business, operating results and financial condition could be harmed. Also, in a number of regions we rely on a limited number of resellers, and our business may be harmed if any of these resellers were to fail to effectively address their specified geographic territories.

In addition, we rely on our channel partners to operate in accordance with the terms of their contractual agreements with us. For example, our agreements with our channel partners limit the terms and conditions pursuant to which they are authorized to resell or distribute our software and offer technical support and related services. We also typically require our channel partners to provide us with the dates and details of product license transactions sold to end user customers. If our channel partners do not comply with their contractual obligations to us, our business, results of operations and financial condition may be harmed.

If we are unable to expand our direct sales capabilities, we may not be able to generate increased revenues.

In order to succeed, we must expand our direct sales force to generate increased revenue from new customers. We intend to increase our number of direct sales professionals. New hires will require training and will take time to achieve full productivity. We cannot be certain that new hires will become as productive as necessary or that we will be able to hire enough qualified individuals in the future. Failure to hire qualified direct sales personnel will preclude us from expanding our business and growing our revenue.

As we pursue new enterprise customers, additional OEM opportunities or more complicated deployments, our sales cycle and deployment processes may become more unpredictable and require greater time and expense.

Our sales cycle may lengthen as we pursue new enterprise customers. Enterprise customers may undertake a significant evaluation process in regard to enterprise software which can last from several months to a year or longer. If our sales cycle were to lengthen in this manner, events may occur during this period that affect the size or timing of a purchase or even cause cancellations, and this may lead to more unpredictability in our business and operating results. Additionally, sales cycles for sales of our software platform to OEMs tend to be longer, ranging from three to 12 months or more, and may involve convincing a partner’s entire organization that our software platform is the appropriate software for its applications. We may spend substantial time, effort and money on our sales efforts without any assurance that our efforts will produce any sales.

In addition, we may face unexpected deployment challenges with enterprise customers or more complicated installations of our software platform. It may be difficult to deploy our software platform if the customer has unexpected database, hardware or software technology issues. Additional deployment complexities may occur if a customer hires a third party to deploy our software platform or if one of our indirect channel partners leads the implementation of our solution. Any difficulties or delays in the initial implementation could cause customers to reject our software or lead to the delay or non-receipt of future orders, in which case our business, operating results and financial condition would be harmed.

Managing our international operations is complex and our failure to do so successfully could harm our business, operating results and financial condition.

We receive a significant portion of our total revenues from international sales from foreign direct and indirect operations. International revenues accounted for approximately 75% for the year ended December 31, 2010 and 77% of our total revenues for each of the years ended December 31, 2009 and 2008. We have facilities located in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, India, Italy, Japan, the Netherlands, Norway, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, the United Arab Emirates and the United Kingdom. We expect to continue to add personnel in additional countries. Our international operations require significant management attention and financial resources.

There are certain risks inherent in our international business activities including, but not limited to:

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managing and staffing international offices and the increased costs associated with multiple international locations

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maintaining relationships with indirect channel partners outside the U.S., whose sales and lead generation activities are very important to our international operations

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multiple legal systems and unexpected changes in legal requirements

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tariffs, export restrictions, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets

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trade laws and business practices favoring local competition

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costs of localizing products and potential lack of acceptance of localized versions

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potential tax issues, including restrictions on repatriating earnings and multiple and conflicting tax laws and regulations

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employer payroll tax withholdings with respect to exercises by employees of options to purchase common stock

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weaker intellectual property protection in some countries

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difficulties in enforcing contracts and collecting accounts receivable, longer sales cycles and longer payment cycles, especially in emerging markets

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the significant presence of some of our competitors in certain international markets

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our ability to adapt to sales practices and customer requirements in different cultures

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political and economic instability, including war and terrorism or the threat of war and terrorism.

We believe that, over time, a significant portion of our revenues and costs will continue to be denominated in foreign currencies. To the extent such denomination in foreign currencies does occur, gains and losses on the conversion to the U.S. dollar of accounts receivable, accounts payable and other monetary assets and liabilities arising from international operations may contribute to fluctuations in our results of operations. Although we may in the future decide to undertake foreign exchange hedging transactions to cover a portion of our foreign currency transaction exposure, we currently do not hedge any foreign currency exposure. If we are not effective in any future foreign exchange hedging transactions in which we engage, our business, operating results and financial condition could be harmed.

In addition, compliance with foreign and U.S. laws and regulations that are applicable to our international operations is complex and may increase our cost of doing business in international jurisdictions, and our international operations could expose us to fines and penalties if we fail to comply with these regulations. These laws and regulations include import and export requirements, U.S. laws such as the Foreign Corrupt Practices Act, and local laws prohibiting corrupt payments to governmental officials. Although we have implemented policies and procedures designed to help ensure compliance with these laws, there can be no assurance that our employees, partners and other persons with whom we do business will not take actions in violation of our policies or these laws. Any violations of these laws could subject us to civil or criminal penalties, including substantial fines or prohibitions on our ability to offer our products and services to one or more countries, and could also materially damage our reputation, our brand and our international expansion efforts.

Our failure to manage any of these risks successfully could harm our international operations and reduce our international sales.

If new industry standards emerge or if we are unable to respond to rapid technological changes, demand for our software platform may be adversely affected.

We believe that our future success will depend in large part on our ability:

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to support current and future industry standards, including databases and operating systems

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to maintain technological competiveness and meet an expanding range of customer requirements

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to introduce new products and features for our customers.

The emergence of new industry standards in related fields may adversely affect the demand for our existing software platform. If new technologies emerged that were incompatible with customer deployments of our software platform, our business and results of operations may be adversely affected. We currently support Open Database Connectivity, or ODBC, and Object Linking and Embedding Database, or OLEDB, standards in database access technology. If we are unable to adapt our software platform on a timely basis to new standards in database access technology, the ability of our software platform to access customer databases could be impaired. In addition, the emergence of new server operating systems standards could adversely affect the demand for our existing software platform. Our platform currently requires the Windows Server operating system when deployed on a server, as used in most multi-user deployments. If customers are unwilling to use Windows Server, we may not be able to achieve compatibility on a timely basis or without substantial research and development and support expense. We currently support all generally available client operating systems that run industry standard web browsers, but we cannot provide assurance that we will be able to support future client operating systems and web browsers in a timely and cost-effective manner, if at all.

The markets for our software platform and services are also characterized by rapid technological and customer requirement changes. In particular, our technology is optimized for servers utilizing the x86 and x64 families of microprocessors. If the speed and performance of these microprocessor families do not continue to increase at the rates we anticipate, our software may not attain the performance speed and capabilities that we expect. Also, if different microprocessor architecture were to gain widespread acceptance in server applications, we may not be able to achieve compatibility on a timely basis or without substantial research and development and support expense. Difficulty by us in achieving compatibility with different microprocessor architecture or other technological change or in satisfying changing customer requirements could render our existing and future products obsolete and unmarketable. As a result, we may not be able to accurately predict the lifecycle of our software platform and services, and they may become obsolete before we receive the amount of revenues that we anticipate from them.

Business intelligence software is inherently complex. The development and testing of new products and product enhancements can require significant research and development expenditures. As a result, substantial delays in the general availability of such new releases or significant problems in the installation or implementation of such new releases could harm our business, operating results and financial condition. We may not successfully develop and market product enhancements or new products that respond to technological change or new customer requirements. Even if we introduce a new product, we may experience a decline in revenues of our existing products that is not fully matched by the new product’s revenue. For example, customers may delay making purchases of a new product to make a more thorough evaluation of the product, or until industry and marketplace reviews become widely available. In addition, we may lose existing customers who choose a competitor’s product rather than migrate to our new product. This could result in a temporary or permanent revenue shortfall and harm our business.

Our business depends on customers renewing their annual maintenance contracts and our ability to collect renewal fees.

Any decline in maintenance renewals could harm our future operating results. We sell our software platform pursuant to a perpetual license with a fixed upfront fee which ordinarily includes one year of maintenance as part of the initial price. Our customers have no obligation to renew their maintenance agreements after the expiration of this initial period, and they may not renew these agreements. We may be unable to predict future customer renewal rates accurately. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our software platform, the prices of our software platform, the prices of products and services offered by our competitors or reductions in our customers’ spending levels. If our customers do not renew their maintenance arrangements or if they renew them on less favorable terms, our revenue may decline and our business will suffer. A substantial portion of our quarterly maintenance revenue is attributable to maintenance agreements entered into during previous quarters. As a result, if there is a decline in renewed maintenance agreements in any one quarter, only a small portion of the decline will be reflected in our maintenance revenue recognized in that quarter and the rest will be reflected in our maintenance revenue recognized in the following four quarters or more. In addition, we may have difficulties collecting renewal fees from our customers, especially in regards to customers located in emerging international markets. If we are unable to collect renewal fees from customers, our business will be harmed.

Our software platform could contain undetected errors, or bugs, which could cause problems with product performance and which could in turn reduce demand for our software platform, reduce our revenue and lead to product liability claims against us.

Software products like ours, which consist of hundreds of thousands of lines of code and incorporate licensed software from third parties, may contain errors and/or defects. Although we test our software extensively, we have in the past discovered software errors in our products after their introduction. Despite testing by us and by our current and potential customers, errors may be found in new products or releases after deployment begins. This could result in lost revenue, damage to our reputation or delays in market acceptance which could harm our business, operating results and financial condition. We may also have to expend resources to correct these defects.

Our license agreements with customers typically contain provisions designed to limit our exposure to product liability, warranty and other claims. It is possible, however, that these provisions may not be effective as a result of existing or future laws of certain domestic or international jurisdictions or unfavorable judicial decisions in such jurisdictions, and we may be exposed to product liability, warranty and other claims. If these claims are made, our potential exposure may be substantial given the use of our products in business-critical applications. A successful product liability claim against us could harm our business, operating results and financial condition.

We face intense competition which may lead to reduced revenue and loss of market share.

The markets for business intelligence software, analytical applications and information management are intensely competitive and subject to rapidly changing technology and evolving standards. In addition, many companies in these markets are offering, or may soon offer, products and services that may compete with our software platform.

We face competitors in several broad categories, including business intelligence software, analytical processes, query, search and reporting tools. We compete with large software corporations, including suppliers of enterprise resource planning software that provide one or more capabilities that are competitive with our products, such as IBM (which acquired Cognos in 2008), Microsoft, Oracle (which acquired Hyperion Solutions in 2007) and SAP AG (which acquired Business Objects in 2008), and with open source business intelligence vendors, including Pentaho and JasperSoft. Open source software is software that is made widely available by its authors and is licensed “as is” for a nominal fee or, in some cases, at no charge. As the use of open source software becomes more widespread, certain open source technology could become competitive with our proprietary technology, which could cause sales of our products to decline or force us to reduce the fees we charge for our products. We also compete, or may increasingly in the future compete, with various independent competitors that are primarily focused on business intelligence products, such as Actuate, Information Builders, MicroStrategy, the SAS Institute and TIBCO. We expect additional competition as other established and emerging companies or open source vendors enter the business intelligence software market and new products and technologies are introduced.

Many of our competitors have longer operating histories, significantly greater financial, technical, marketing or other resources and greater name recognition than we do. In addition, many of our competitors have strong relationships with current and potential customers and extensive knowledge of the business intelligence industry. As a result, they may be able to respond more quickly to new or emerging technologies and changes in customer requirements or devote greater resources to the development, promotion and sale of their products than us. Increased competition may lead to price cuts, fewer customer orders, reduced gross margins, longer sales cycles and loss of market share. We may not be able to compete successfully against current and future competitors, and our business, operating results and financial condition will be harmed if we fail to meet these competitive pressures.

Current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others. By doing so, these competitors may increase their ability to meet the needs of our potential customers. Our current or prospective indirect channel partners may establish cooperative relationships with our current or future competitors. These relationships may limit our ability to sell our software platform through specific distribution channels. Accordingly, new competitors or alliances among current and future competitors may emerge and rapidly gain significant market share. These developments could limit our ability to obtain revenues from new customers and to maintain technical support revenues from our installed customer base. If we are unable to compete successfully against current and future competitors, our business, operating results and financial condition would be harmed.

If customers demand business intelligence software to be provided via a “software as a service” business model, our business could be harmed.

Software as a service, or SaaS, is a model of software deployment where a software provider typically licenses an application to customers for use as a service on demand through web browser technologies. A SaaS business model can require a vendor to undertake substantial capital investments and related sales and support resources and personnel. If customers were to require business intelligence software like QlikView to be provided via a SaaS deployment, we would need to undertake these investments in order to implement this alternative business model. In addition, we would be obligated to apply new revenue recognition policies. Even if we undertook these investments, we may be unsuccessful in implementing a SaaS business model. These factors could harm our business, operating results and financial condition.

If we fail to develop our brand cost-effectively, our business may be harmed.

We believe that developing and maintaining awareness and integrity of our brand in a cost effective manner are important to achieving widespread acceptance of our existing and future products and are important elements in attracting new customers. We believe that the importance of brand recognition will increase as competition in our market further intensifies. Successful promotion of our brand will depend on the effectiveness of our marketing efforts and on our ability to provide reliable and useful products at competitive prices. Brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building our brand. We also rely on our customer base and community of end-users in a variety of ways, including to give us feedback on our products and to provide user-based support to our other customers. If we fail to promote and maintain our brand successfully or to maintain loyalty among our customers and QlikCommunity, our user community, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract new customers or retain our existing customers and our business may be harmed.

If we are unable to manage our growth effectively, our revenues and profits could be adversely affected.

We have recently expanded our operations and employee headcount significantly, and we anticipate that further significant expansion will be required. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Sustaining our growth will place significant demands on our management as well as on our administrative, operational and financial resources. To manage our growth, we must continue to improve our operational, financial and management information systems and expand, motivate and manage our workforce. If we are unable to manage our growth successfully without compromising our quality of service and our profit margins, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our revenues and profits could be harmed. Risks that we face in undertaking future expansion include:

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training new personnel to become productive and generate revenue

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controlling expenses and investments in anticipation of expanded operations

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implementing and enhancing our administrative infrastructure, systems and processes

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addressing new markets

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expanding operations in the U.S. and new international regions.

A failure to manage our growth effectively could harm our ability to market and sell our software platform and maintenance services.

If we are unable to recruit or retain skilled personnel, or if we lose the services of any of our key personnel, our business, operating results and financial condition could be harmed.

Our future success depends on our continuing ability to attract, train and retain highly skilled personnel, and we face intense competition for these employees. We may not be able to retain our current key employees or attract, train or retain other highly skilled personnel in the future. If we lose the services of one or all of these individuals, or if we are unable to attract, train and retain the highly skilled personnel we need, our business, operating results and financial condition could be harmed.

In addition, we must successfully integrate new employees into our operations and generate sufficient revenues to justify the costs associated with these employees. If we fail to successfully integrate employees or to generate the revenue necessary to offset employee-related expenses, our business and financial results could be adversely affected.

The success of our business is also heavily dependent on the leadership of our key management personnel, including Lars Björk, Chief Executive Officer, and other members of our senior management team. The loss of one or more key employees could adversely affect our continued operations.

Our future success depends in a large part upon the continued service of key members of our senior management team. In particular, Lars Björk, our Chief Executive Officer, is critical to the overall management of QlikTech, as well as the development of our technology, our culture, and our strategic direction. The loss of any of our management or key personnel could seriously harm our business.

Future product development is dependent on adequate research and development resources.

In order to remain competitive, we must continue to develop new products, applications and enhancements to our existing software platform. This is particularly true as we further expand our product capabilities. Maintaining adequate research and development resources, such as the appropriate personnel, talent and development technology, to meet the demands of the market is essential. Our research and development organization is located in Lund, Sweden, and we may have difficulty hiring suitably skilled personnel in this region or expanding our research and development organization to facilities located in other geographic locations. In addition, many of our competitors expend a considerably greater amount of resources on their respective research and development programs. Our failure to maintain adequate research and development resources or to compete effectively with the research and development programs of our competitors would present an advantage to such competitors.

If we fail to offer high quality customer support, our business would suffer.

Once our software platform and solutions are deployed to our customers, our customers rely on our support services to resolve any related issues. High quality customer support is important for the successful marketing and sale of our software platform and services and for the renewal of existing customers. The importance of high quality customer support will increase as we expand our business and pursue new enterprise customers. If we do not help our customers quickly resolve post-deployment issues and provide effective ongoing support, our ability to sell our software platform and professional services to existing customers would suffer and our reputation with existing or potential customers would be harmed.

We currently utilize a combination of internal support personnel and third party support organizations, and we cannot provide assurance that actions taken or not taken by our third party support organization will not harm our reputation or business. As we expand our sales, we will be required to engage and train additional support personnel and resources. Further, our support organization will face additional challenges as we enter new international markets, including challenges associated with delivering support, training and documentation in languages required by new customers. If we fail to maintain high quality customer support or to grow our internal and external support organization to match any future sales growth, our business will suffer.

If we do not meet our revenue forecasts, we may be unable to reduce our expenses to avoid or minimize harm to our results of operations.

Our revenues are difficult to forecast and are likely to fluctuate significantly from period to period. We base our operating expense budgets on expected revenue trends, and many of our expenses, such as office and equipment leases and personnel costs, will be relatively fixed in the short term and will increase over time as we make investments in our business. Our estimates of sales trends may not correlate with actual revenues in a particular quarter or over a longer period of time. Variations in the rate and timing of conversion of our sales prospects into actual licensing revenues could cause us to plan or budget inaccurately and those variations could adversely affect our financial results. In particular, delays, reductions in amount or cancellation of customers’ purchases or an increase in the number of customers exercising our 30-day money back guarantee on our software platform would adversely affect the overall level and timing of our revenues, and our business, results of operations and financial condition could be harmed. Due to the relatively fixed nature of many of our expenses, we may be unable to adjust spending quickly enough to offset any unexpected revenue shortfall.

In the course of our sales to customers, we may encounter difficulty collecting accounts receivable and could be exposed to risks associated with uncollectible accounts receivable. In the event we are unable to collect on our accounts receivable, it could negatively affect our cash flows, operating results and business.

Our methodologies and software solutions may infringe the intellectual property rights of third parties or be found to contain unexpected open source software, and this may create liability for us or otherwise harm our business.

Third parties may claim that our current or future products infringe their intellectual property rights, and such claims may result in legal claims against our customers and us. These claims may damage our reputation, harm our customer relationships and create liability for us. We expect the number of such claims will increase as the number of products and the level of competition in our industry segments grow, the functionality of products overlap and the volume of issued software patents and patent applications continues to increase. We generally agree in our customer contracts to indemnify customers for expenses or liabilities they incur as a result of third party intellectual property infringement claims associated with our products or services. To the extent that any claim arises as a result of third party technology we have licensed for use in our product, we may be unable to recover from the appropriate third party any expenses or other liabilities that we incur.

In addition, software products like ours that contain thousands of lines of software code at times incorporate open source software code. The use of open source software code is typically subject to varying forms of software licenses, called copyleft or open source licenses. These types of licenses may require that any person who creates a software product that redistributes or modifies open source software that was subject to an open source license must also make their own software product subject to the same open source license. This can lead to a requirement that the newly created software product be provided free of charge or be made available or distributed in source code form. Although we do not believe our software includes any open source software that would result in the imposition of any such requirement on portions of our software product, our software could be found to contain this type of open source software.

Responding to any infringement claim, regardless of its validity, or discovering open source software in our product could harm our business, operating results and financial condition, by, among other things:

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resulting in time-consuming and costly litigation

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diverting management’s time and attention from developing our business

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requiring us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable

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causing product shipment or deployment delays

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requiring us to stop selling certain of our products

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requiring us to redesign certain of our products using alternative non-infringing or non-open source technology or practices, which could require significant effort and expense

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requiring us to disclose our software source code, the detailed program commands for our software program

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requiring us to satisfy indemnification obligations to our customers.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our software platform, services and brand.

As of December 31, 2010, we had three issued U.S. patents and one pending U.S. patent expiring at various times ranging from 2015 to 2029 and 19 issued and six pending foreign patents expiring at various times ranging from 2015 to 2029. We rely on a combination of copyright, trademark, patent, trade secrets, confidentiality procedures and contractual commitments to protect our proprietary information. For example, we license our software pursuant to click-wrap or signed license agreements that impose certain restrictions on a licensee’s ability to utilize the software. We also seek to avoid disclosure of our intellectual property, including by requiring those persons with access to our proprietary information to execute confidentiality agreements with us and by restricting access to our source code.

Despite our efforts, these measures can only provide limited protection. Unauthorized third parties may try to copy or reverse engineer portions of our software platform or may otherwise obtain and use our intellectual property. Any patents owned by us may be invalidated, circumvented or challenged. Any of our pending or future patent applications, whether or not being currently challenged, may not be issued with the scope of the claims we seek, if at all. Legal standards relating to the validity, enforceability and scope of protection of intellectual property rights in other countries are uncertain and may afford little or no effective protection for our services, software, methodology and other proprietary rights. Consequently, we may be unable to prevent our intellectual property rights from being exploited abroad, which could require costly efforts to protect them. Policing the unauthorized use of our proprietary rights is expensive, difficult and, in some cases, impossible. Litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of management resources, either of which could harm our business. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property. If we cannot protect our proprietary technology against unauthorized copying or use, we may not remain competitive.

Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. In addition, our attempts to protect our proprietary technology and intellectual property rights may be further limited as our employees may be recruited by our current or future competitors and may take with them significant knowledge of our proprietary information. Consequently, others may develop services and methodologies that are similar or superior to our services and methodologies or may design around our intellectual property.

Computer “hackers” may damage our systems, services and products, and breaches of data protection could impact our business.

Computer programmers and hackers may be able to penetrate our network security and misappropriate our confidential information or that of third parties, create system disruptions or cause interruptions or shutdowns of our internal systems and services. If successful, any of these events could damage our computer systems or those of our customers and could disrupt or prevent us from providing timely maintenance and support for our software platform. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. The costs to us to eliminate or alleviate security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and the efforts to address these problems could result in interruptions, delays, cessation of service and loss of existing or potential customers and may impede our sales and other critical functions.

In the course of our regular business operations and providing maintenance and support services to our customers, we process and transmit proprietary information and sensitive or confidential data, including personal information of employees, customers and others. Breaches in security could expose us, our customers or the individuals affected to a risk of loss or misuse of this information, which could result in potential regulatory actions, litigation and potential liability for us, as well as the loss of existing or potential customers and damage to our brand and reputation.

Our business could be harmed as a result of the risks associated with our acquisitions.

As part of our business strategy, we may from time to time seek to acquire businesses that provide us with additional intellectual property, customer relationships and geographic coverage. We can provide no assurances that we will be able to find and identify desirable acquisition targets or that we will be successful in entering into a definitive agreement with any one target. In addition, even if we reach a definitive agreement with a target, there is no assurance that we will complete any future acquisition.

Any acquisitions we undertake will likely be accompanied by business risks which may include, among other things:

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the effect of the acquisition on our financial and strategic position and reputation

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the failure of an acquisition to result in expected benefits, which may include benefits relating to enhanced revenues, technology, human resources, costs savings, operating efficiencies, goodwill and other synergies

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the difficulty, cost and management effort required to integrate the acquired businesses, including costs and delays in implementing common systems and procedures and costs and delays caused by communication difficulties

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the assumption of certain known or unknown liabilities of the acquired business, including litigation-related liabilities

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the reduction of our cash available for operations and other uses, the increase in amortization expense related to identifiable assets acquired, potentially dilutive issuances of equity securities or the incurrence of debt

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a lack of experience in new markets, new business culture, products or technologies or an initial dependence on unfamiliar distribution partners

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the possibility that we will pay more than the value we derive from the acquisition

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the impairment of relationships with customers, partners or suppliers of the acquired business or our customers

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the potential loss of key employees of the acquired company.

These factors could harm our business, results of operations or financial condition.

In addition to the risks commonly encountered in the acquisition of a business as described above, we may also experience risks relating to the challenges and costs of closing a transaction. The risks described above may be exacerbated as a result of managing multiple acquisitions at once.

Business disruptions could affect our operating results.

A significant portion of our research and development activities and certain other critical business operations are concentrated at a single facility in Sweden. We are also a highly automated business and a disruption or failure of our systems could cause delays in completing sales and providing services. A major natural disaster, fire, act of terrorism or other catastrophic event that results in the destruction or disruption of any of our critical business operations or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be harmed.

Future litigation could harm our results of operation and financial condition.

In addition to intellectual property litigation, from time to time, we may be subject to other litigation. We record a related liability when we can make a reasonable estimate of the liability relating to pending litigation and determine that it is probable. As additional information becomes available, we assess the potential liability and revise estimates as appropriate. However, because of uncertainties relating to litigation, the amount of our estimates could be wrong. In addition to the related cost and use of cash, pending or future litigation could cause the diversion of management’s attention and resources.

We are incurring significant increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could harm our operating results.

As a public company, we are incurring significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the Nasdaq Global Market (“Nasdaq”) impose various requirements on public companies, including requirements with respect to corporate governance practices. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We also expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

We may need additional capital in the future and it may not be available on acceptable terms, if at all.

We have historically relied on outside financing and cash flow from operations to fund our operations, capital expenditures and expansion. However, we may require additional capital in the future to fund our operations and acquisitions, finance investments in equipment or personnel or respond to competitive pressures. We cannot provide assurance that additional financing will be available on terms acceptable to us. In addition, the terms of available financing may place limits on our financial and operational flexibility. If we are unable to obtain sufficient capital in the future, we may not be able to continue to meet customer demand for service quality, availability and competitive pricing. We also may be forced to reduce our operations or may not be able to expand or acquire complementary businesses, develop new services or otherwise respond to changing business conditions or competitive pressures.

Prolonged economic uncertainties or downturns could materially harm our business.

Current or future economic downturns could harm our business and results of operations. Negative trends in the general economy both in the U.S. and abroad, including trends resulting from actual or threatened military action by the U.S., terrorist attacks on the U.S., Europe or elsewhere, and financial and credit market fluctuations, could cause a decrease in corporate spending on business intelligence software in general and negatively affect the rate of growth of our business.

General worldwide economic conditions have experienced a significant downturn. These conditions make it extremely difficult for our customers and us to accurately forecast and plan future business activities, and they could cause our customers to slow spending on our products and services, which would delay and lengthen sales cycles. Furthermore, during challenging economic times our customers may face issues in gaining timely access to sufficient credit, which could result in an impairment of their ability to make timely payments to us. If that were to occur, we may be required to increase our allowance for doubtful accounts and our results would be harmed.

We maintain operating bank accounts at financial institutions in the U.S., Sweden and other regions. In particular, a significant amount of our cash balances in the U.S. and Sweden are in excess of the insurance limits of the U.S. government’s Federal Deposit Insurance Corporation, or FDIC and Swedish government’s Swedish Deposit Insurance Scheme, or Insättningsgarantin. The FDIC insures deposits in most banks and savings associations located in the U.S. and protects depositors against the loss of their deposits if an FDIC-insured bank or savings association fails, subject to specified monetary ceilings. Similarly, the Swedish Deposit Insurance Scheme is a state-provided guarantee of deposits in accounts at Swedish banks, subject to specified monetary ceilings. We could incur substantial losses if the underlying financial institutions in these or other regions fail or are otherwise unable to return our deposits.

We have a significant number of customers in the consumer products and services, manufacturing and financial services industries. A substantial downturn in these industries may cause firms to react to worsening conditions by reducing their capital expenditures in general or by specifically reducing their spending on information technology. Customers in these industries may delay or cancel information technology projects or seek to lower their costs by renegotiating vendor contracts. Also, customers with excess information technology resources may choose to develop in-house software solutions rather than obtain those solutions from us. Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers. In addition, the increased pace of consolidation in certain industries may result in reduced overall spending on our products.

We cannot predict the timing, strength or duration of any economic slowdown or recovery, generally or in the consumer products and services, manufacturing and financial services industries. If the economic conditions of the general economy or markets in which we operate worsen from present levels, our business, financial condition and results of operations could be harmed.

If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.

The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal control over financial reporting and disclosure controls and procedures. Under the SEC’s current rules, beginning with the year ending December 31, 2011, we will be required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our independent registered public accounting firm will also be required to report on our internal control over financial reporting. Our testing and our independent registered public accounting firm’s testing may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses and render our internal control over financial reporting ineffective. Due to the extent of our international operations, our financial reporting requires substantial international activities, resources and reporting consolidation. We expect to incur substantial accounting and auditing expense and to expend significant management time in complying with the requirements of Section 404. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to investigations or sanctions by the SEC, the Financial Industry Regulatory Authority, Inc., known as FINRA, or other regulatory authorities. In addition, we could be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings.

We have previously identified material weaknesses in our internal control over financial reporting, and if we are unable to achieve and maintain effective internal control over financial reporting, this could have a material adverse effect on our business and common stock price.

We produce our consolidated financial statements in accordance with the requirements of United States generally accepted accounting principles (“U.S. GAAP”), but our internal accounting controls may not currently meet all standards applicable to companies with publicly traded securities. Effective internal controls are necessary for us to provide reliable financial reports to help mitigate the risk of fraud and to operate successfully as a publicly traded company.

In connection with the preparation of our consolidated financial statements for the year ended December 31, 2009, we identified a material weakness in the design and operation of our internal controls over financial reporting relating to the accounting for expenses in one of our European operating subsidiaries. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls. Specifically, we determined that we had insufficient reconciliation and oversight of our accounting for accrued and prepaid expenses in one of our European operating subsidiaries during our financial statement close process which would have resulted in the overstatement of our assets and liabilities in the consolidated balance sheet and an overstatement of operating expenses and understatement of net income. During 2010, we have implemented procedures and controls designed to improve communication and overview of financial reporting by our geographic territories, including the affected operating subsidiary noted above, during our reporting consolidation processes. These procedures and controls include a monthly review of each of our territory’s financial results by financial controllers outside of the respective territory; increased communications, including monthly videoconferences among all regional financial controllers to address any material topics; and a quarterly requirement for all reporting territories to provide detailed commentary and analysis of material balance sheet positions and operating results for internal review purposes. We believe we have remediated this material weakness. In connection with the preparation of our consolidated financial statements for the year ended December 31, 2008, we identified a material weakness in our formal financial statement closing process. We remediated this material weakness during 2009 by implementing additional controls, including increasing our corporate accounting staff, implementing additional system controls and establishing a formalized closing calendar.

Although we believe we have addressed the internal control deficiencies that led to the material weaknesses, the measures we have taken may not be effective given our global operations and distribution capabilities, and we may not be able to implement and maintain effective internal control over financial reporting in the future. If we have these or other material weaknesses in the future, it could affect the financial results that we report or create a perception that those financial results do not fairly state our financial condition or results of operations. Either of those events could have an adverse effect on the value of our common stock.

Our results of operations may be adversely affected by changes in or interpretations of accounting standards.

We prepare our consolidated financial statements in conformity with U.S. GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting standards. It is possible that future requirements, including the recently proposed implementation of International Financial Reporting Standards (“IFRS”), could change our current application of U.S. GAAP, resulting in a material adverse impact on our financial position or results of operations. Our accounting policies that recently have been or may be affected by changes in the accounting rules are as follows:

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software revenue recognition

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accounting for income taxes

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accounting for leases

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accounting for business combinations and related goodwill

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accounting for stock issued to employees

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assessing fair value of financial and non-financial assets

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application, if any, of IFRS.

We continuously review our compliance with all new and existing revenue recognition accounting pronouncements. Depending upon the outcome of these ongoing reviews and the potential issuance of further accounting pronouncements, implementation guidelines and interpretations, we may be required to modify our reported results, revenue recognition policies or business practices which could harm our results of operations.

We may have exposure to additional tax liabilities.

We are subject to taxes in the U.S. and numerous foreign jurisdictions. All of these jurisdictions have in the past and may in the future make changes to their corporate income tax rates and other income tax laws which could increase our future income tax provision.

Our future income tax obligations could be affected by earnings that are lower than anticipated in jurisdictions where we have lower statutory rates and by earnings that are higher than anticipated in jurisdictions where we have higher statutory rates, by changes in the valuation of our deferred tax assets and liabilities, changes in the amount of unrecognized tax benefits or by changes in tax laws, regulations, accounting principles or interpretations thereof.

Our determination of our tax liability is subject to review by applicable U.S. federal, state and local and foreign tax authorities. Any adverse outcome of such a review could harm our operating results and financial condition. The determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment and, in the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. Moreover, as a multinational business, we have subsidiaries that engage in many intercompany transactions in a variety of tax jurisdictions where the ultimate tax determination is uncertain.

We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property and goods and services taxes in the United States and various foreign jurisdictions. We are regularly under audit by tax authorities with respect to these non-income taxes and may have exposure to additional non-income tax liabilities which could have an adverse effect on our results of operations and financial condition. In addition, our future effective tax rates could be favorably or unfavorably affected by changes in tax rates, changes in the valuation of our deferred tax assets or liabilities, or changes in tax laws or their interpretation. Such changes could have a material adverse impact on our financial results.

As a result of these and other factors, the ultimate amount of tax obligations owed may differ from the amounts recorded in our financial statements and any such difference may harm our financial results in future periods in which we change our estimates of our tax obligations or in which the ultimate tax outcome is determined.

If securities or industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that securities or industry analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us adversely change their recommendation regarding our stock, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, interest in our stock could decrease, which could cause our stock price or trading volume to decline.

The price of our common stock may be volatile and fluctuate substantially.

The market price of our common stock could be highly volatile and may fluctuate substantially due to the following factors (in addition to the other risk factors described in this section):

•

quarterly variations in our results of operations or those of our competitors

•

announcements by us or our competitors of acquisitions, new products, significant contracts or commercial relationships

•

our ability to respond to changing industry standards, technological developments or customer requirements on a timely basis

•

commencement of, or our involvement in, litigation

•

any major change in our board of directors or management

•

recommendations by securities analysts or changes in earnings estimates

•

announcements about our earnings that are not in line with analyst expectations

•

announcements by our competitors of their earnings that are not in line with analyst expectations

•

the volume of shares of our common stock available for public sale

•

sales of stock by us or by our stockholders

•

short sales, hedging and other derivative transactions involving shares of our common stock

•

adoption of new accounting standards

•

general economic conditions in the U.S. and abroad and slow or negative growth of related markets

•

general political conditions in the U.S. and abroad, including terrorist attacks, war or threat of terrorist attacks or war.

In addition, the stock market in general, Nasdaq and the market for technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. These broad market and industry factors may materially harm the market price irrespective of our operating performance. As a result of these factors, an investor might be unable to resell their shares at or above the price paid. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against the affected company. This type of litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Future sales of our common stock in the public market, including sales by our stockholders with significant holdings, may depress our stock price.

The market price of our common stock could drop due to sales of a large number of shares or the perception that such sales could occur, including sales or perceived sales by our directors, officers or large stockholders. These sales could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds through future offerings of common stock.

Our management will have broad discretion over the use of our cash reserves, if any, and might not apply this cash in ways that increase the value of an investment.

Our management will have broad discretion to use our cash reserves, if any, and you will be relying on the judgment of our management regarding the application of this cash. They might not apply our cash in ways that increase the value of an investment. We expect to use our cash reserves for general corporate purposes, including working capital, capital expenditures, acquisitions and further development of our services and solutions. We have not allocated this cash for any specific purposes. Our management might not be able to yield any return on the investment and use of this cash.

We currently do not intend to pay dividends on our common stock, and consequently, your only opportunity to achieve a return on investment is if the price of our common stock appreciates and you sell your shares at a price above your cost.

We currently do not intend to declare or pay dividends on shares of our common stock in the foreseeable future. See “Dividend Policy” for more information. Consequently, your only opportunity to achieve a return on your investment in our company will be if the market price of our common stock appreciates and you sell your shares at a price above your cost. There is no guarantee that the price of our common stock will ever exceed the price that you pay. Investors seeking cash dividends should not purchase our common stock.

Anti-takeover provisions in our certificate of incorporation and bylaws and in Delaware law could prevent or delay a change in control of our company.

We are a Delaware corporation, and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder even if a change of control would be beneficial to our existing stockholders. In addition, our restated certificate of incorporation and amended and restated bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Our restated certificate of incorporation and amended and restated bylaws:

•

authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt

•

do not provide for cumulative voting in the election of directors which would allow holders of less than a majority of the stock to elect some directors

•

establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election

•

require that directors only be removed from office for cause

•

provide that vacancies on the board of directors, including newly-created directorships, may be filled only by a majority vote of directors then in office

•

limit who may call special meetings of stockholders

•

prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders

•

establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

ITEM 1B.		UNRESOLVED STAFF COMMENTS

None.

ITEM 2.		PROPERTIES

Our global corporate headquarters and principal executive offices are located in Radnor, Pennsylvania. In November 2010, we entered into an amendment to the lease for our global corporate headquarters and principal executive offices which increased the aggregate rentable square footage to 39,200 square feet. Our development offices are located in Lund, Sweden. In December 2010, we entered into a transfer agreement with a third party to lease an aggregate rentable square footage in Lund, Sweden of 11,253 square feet. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations and Commitments & Off-Balance Sheet Arrangements.”

Location		Type of Facility		Size (in sq. ft)				Ownership Status		Lease Expiration Date
Radnor, Pennsylvania		Headquarters			17,330			Leased		September 30, 2011
Lund, Sweden		Corporate and Research & Development			11,253			Leased		October 31, 2016

We maintain other leased locations in the U.S. and throughout the world. In the U.S., we lease additional office space in Boston, Massachusetts, Chicago, Illinois, Dallas, Texas, Raleigh, North Carolina, and San Mateo, California. Throughout the world, we lease offices in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, India, Italy, Japan, the Netherlands, Norway, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, the United Arab Emirates and the United Kingdom. We believe our current facilities and planned expansion facilities will be adequate for the foreseeable future; however, we will continue to seek additional space as needed to satisfy any growth.

ITEM 3.		LEGAL PROCEEDINGS

From time to time, we may become involved in routine legal proceedings in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, operating results, financial condition or cash flows.

ITEM 4.		REMOVED AND RESERVED

PART II

ITEM 5.		MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on Nasdaq under the symbol “QLIK.” The following table sets forth, for the period indicated, the high and low sales prices of our common stock as reported by Nasdaq.

		High				Low
Year ended December 31, 2009:
First quarter		$	—			$	—
Second quarter		$	—			$	—
Third quarter		$	—			$	—
Fourth quarter		$	—			$	—
Year ended December 31, 2010:
First quarter		$	—			$	—
Second quarter		$	—			$	—
Third quarter		$	27.70			$	12.00
Fourth quarter		$	29.25			$	20.55

As of March 14, 2011, there were approximately 240 holders of record of our common stock. The number of holders of record of our common stock does not reflect the number of beneficial holders whose shares are held by depositors, brokers or other nominees.

Dividend Policy

We have never paid cash dividends. It is our policy to retain earnings to finance the growth and development of our business and, therefore, we do not anticipate paying any dividends in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides certain information regarding our equity compensation plans in effect as of December 31, 2010:

Equity Compensation Plan Information
										Number of Securities
		Number of								Remaining Available
		Securities to be								for Issuance Under
		Issued Upon				Weighted-Average				Equity Compensation
		Exercise of				Exercise Price of				Plans (Excluding
		Outstanding Options,				Outstanding Options,				Securities Reflected
Plan Category		Warrant and Rights				Warrants and Rights				in Column (a))
		(a)				(b)				(c)
Equity compensation plans approved by security holders			12,094,265	(1)		$	2.98	(2)			2,644,280	(3)
Equity compensation plans not approved by security holders			—				—				—
Total			12,094,265	(1)		$	2.98	(2)			2,644,280	(3)

Stock Performance Graph

The following graph compares the cumulative 5-month total return to shareholders on Qlik Technologies Inc.’s common stock relative to the cumulative total returns of the NASDAQ Composite index and the NASDAQ Computer & Data Processing index. The graph assumes that the value of the investment in the Company’s common stock and in each of the indexes (including reinvestment of dividends) was $100 on July 16, 2010 and tracks it through December 31, 2010.

		July 16, 2010				December 31, 2010
Qlik Technologies Inc.		$	100.00			$	202.11
NASDAQ Composite		$	100.00			$	126.26
NASDAQ Computer & Data Processing		$	100.00			$	131.76

Recent Sales of Unregistered Securities

No underwriters were involved in the foregoing sales of securities. The issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act, Rule 701 promulgated under Section 3(b) of the Securities Act or Regulation S under the Securities Act. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the stock certificates, warrant agreements and option agreements issued in such transactions.

Use of Proceeds

In July 2010, we completed the initial public offering of shares of our common stock, in which 12,880,000 shares of common stock were sold at a price to the public of $10.00 per share for an aggregate offering price of $128.8 million. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-165844), which was declared effective by the SEC on July 15, 2010. The offering commenced as of July 15, 2010 and did not terminate before all of the securities registered in the registration statement were sold. The syndicate of underwriters was led by Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., and J.P. Morgan Securities Inc. as joint book-running managers for the offering, Jefferies & Company, Inc. and Stifel Nicolaus Weisel served as co-managers for the offering. The net proceeds from the initial public offering were approximately $115.1 million after deducting underwriting discounts of $9.0 million and offering costs of $4.7 million.

We used approximately $5.4 million of the net proceeds from the offering to repay in full the principal and accrued interest and prepayment fee on our prior debt facility. We intend to use the balance of the net proceeds from the offering for working capital and other general corporate purposes, including financing our growth, developing new products and funding capital expenditures. Pending such usage, we have invested the net proceeds primarily in short-term, interest-bearing money market accounts.

ITEM 6.		SELECTED CONSOLIDATED FINANCIAL DATA

The consolidated statements of income data for the three years ended December 31, 2010 and the consolidated balance sheet data as of December 31, 2010 and 2009 have been derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The consolidated statements of income data for the years ended December 31, 2007 and 2006 and the consolidated balance sheet data as of December 31, 2008, 2007 and 2006 have been derived from our audited consolidated financial statements that do not appear in this Annual Report on Form 10-K. The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Conditions and Operations” set forth below and our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The historical results are not necessarily indicative of the results to be expected in any future period.

		Year Ended December 31,
		2010				2009				2008				2007				2006
		(in thousands, except share and per share data)
Consolidated statements of income data:
Revenue:
License revenue		$	145,225			$	99,864			$	74,446			$	51,482			$	28,915
Maintenance revenue			59,846				41,390				29,401				17,747				9,797
Professional services revenue			21,450				16,105				14,417				11,357				5,558
Total revenue			226,521				157,359				118,264				80,586				44,270
Cost of revenue:
License revenue			3,670				3,663				3,071				2,949				1,140
Maintenance revenue			3,998				1,635				1,365				580				352
Professional services revenue			16,054				11,802				9,562				8,177				4,582
Total cost of revenue			23,722				17,100				13,998				11,706				6,074
Gross profit			202,799				140,259				104,266				68,880				38,196
Operating expenses:
Sales and marketing			122,394				93,349				74,267				48,249				26,999
Research and development			13,537				8,735				8,258				5,419				3,275
General and administrative			39,300				25,009				20,190				15,154				9,699
Total operating expenses			175,231				127,093				102,715				68,822				39,973
Income (loss) from operations			27,568				13,166				1,551				58				(1,777	)
Other income (expense), net			(6,854	)			(4,529	)			3,304				(463	)			(748	)
Income (loss) before benefit (provision) for income taxes			20,714				8,637				4,855				(405	)			(2,525	)
Benefit (provision) for income taxes			(7,198	)			(1,776	)			(1,860	)			40				—
Net income (loss)		$	13,516			$	6,861			$	2,995			$	(365	)		$	(2,525	)
Net income (loss) per common share:
Basic		$	0.24			$	0.07			$	0.01			$	(0.03	)		$	(0.20	)
Diluted		$	0.21			$	0.06			$	0.01			$	(0.03	)		$	(0.20	)
Weighted average number of common shares:
Basic			45,232,782				16,267,186				14,552,999				13,526,926				12,515,571
Diluted			52,061,916				20,778,448				16,523,443				13,526,926				12,515,571

The chart above includes the following stock-based compensation expense:

		2010				2009				2008				2007				2006
		(in thousands)
Cost of revenue		$	188			$	82			$	39			$	12			$	2
Sales and marketing			1,572				733				285				103				12
Research and development			96				79				19				6				1
General and administrative			1,162				585				388				69				11
		$	3,018			$	1,479			$	731			$	190			$	26

		Year Ended December 31,
		2010				2009				2008				2007				2006
		(in thousands)
Consolidated balance sheet data:
Cash and cash equivalents		$	158,712			$	24,852			$	14,800			$	9,214			$	4,401
Working capital			149,069				14,829				12,155				2,411				2,958
Total assets			265,064				102,967				67,018				50,684				25,827
Deferred revenue			50,024				35,575				22,143				17,297				9,760
Long-term debt, including current portion			—				11,436				10,762				1,855				1,965
Convertible preferred stock			—				23,901				23,901				23,901				23,901
Total stockholders’ equity (deficit)			159,190				(9,103	)			(17,368	)			(20,877	)			(21,190	)

ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Consolidated Financial Data” and our consolidated financial statements and related notes appearing elsewhere in this Annual Report on 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth under “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

Introduction

Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided to help provide an understanding of our financial condition and results of operations. This item of our Annual Report on Form 10-K is organized as follows:

•

Overview and Key Financial Metrics and Trends. This section provides a general description of our business, the key financial metrics that we use in assessing our performance, and anticipated trends that we expect to affect our financial condition and results of operations.

•

Consolidated Results of Operations. This section provides an analysis of our results of operations for the years ended December 31, 2010, 2009 and 2008.

•

Foreign Exchange Rates. This section provides for impact of foreign exchange rates.

•

Seasonality. This section discusses the seasonality in the sale of our products and services.

•

Acquisitions. This section discusses recent acquisitions and how we account for them.

•

Liquidity and Capital Resources. This section provides an analysis of our cash flows for the years ended December 31, 2010, 2009 and 2008, a discussion of our capital requirements, and the resources available to us to meet those requirements.

•

Critical Accounting Policies and Estimates. This section discusses accounting policies that are considered important to our financial condition and results of operations. The accounting policies require significant judgment or require estimates on our part in applying them. Our significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 2 to the consolidated financial statements.

•

Contractual Obligations and Commitments & Off-Balance Sheet Arrangements. This section discusses contractual obligations and commitments and off-balance sheet arrangements expected to have an impact on our liquidity and cash flow in future periods.

•

Inflation. This section discusses inflation that could impact our financial condition and results of operations.

•

Recent Accounting Pronouncements. This section provides for recent accounting pronouncements that could impact our financial condition and results of operations.

Overview

We have pioneered a powerful, user-driven business intelligence solution that enables our customers to make better and faster business decisions. Our Business Discovery platform, QlikView, combines enterprise-class analytics and search functionality with the simplicity and ease-of-use found in office productivity software tools for a broad set of business users. QlikView is powered by our in-memory associative search technology, which has utilized rapid advances in computing power to yield significant improvement in flexibility and performance at a lower cost than traditional business intelligence solutions. We have grown our customer base from over 4,000 active customers in 2006 to approximately 18,000 active customers as of December 31, 2010 and increased our revenue at a 50.4% compound annual growth rate during the same period. We added an average of approximately 400 new customers per month during fiscal year 2010. Our solution addresses the needs of a diverse range of customers from middle market customers to large enterprises such as Autodesk, Campbell Soup Company, Colonial Life, The Dannon Company, Inc., Heidelberger Druckmaschinen AG, ING, Kraft foods, Lifetime Brands, Nasdaq OMX, National Health Service (NHS), Qualcomm, Symantec and Volvo Car UK Limited. We currently have customers in over 100 countries, and approximately 75%, 77%, and 77% of our revenue for the years ended December 31, 2010, 2009, and 2008, respectively, was derived internationally.

We have a differentiated business model designed to accelerate the adoption of our product by reducing the time and cost to purchase and implement our software. Our low risk approach to product sales, which offers free product downloads to individuals and a 30-day money back guarantee upon purchase, provides a needed alternative to costly, all-or-nothing, traditional business intelligence sales models. We initially focus on specific business users or departments within a prospective customer’s organization and seek to solve a targeted business need. After demonstrating QlikView’s benefits to initial adopters within an organization, we work to expand sales of our product to other business units, geographies and use cases with the long-term goal of broad organizational deployment.

We license QlikView under perpetual licenses which include one year of maintenance as part of the initial purchase price of the product. Our customers can renew, and generally have renewed, their maintenance agreements for a fee that is based upon a percentage of the initial license fee paid. For each of the years ended December 31, 2010 and 2009, our total revenue was comprised of 64% license revenue, 26% maintenance revenue, and 10% professional services revenue. For the year ended December 31, 2008, our total revenue was comprised of 63% license revenue, 25% maintenance revenue, and 12% professional services revenue. We have a diversified distribution model that consists of a direct sales force and a partner network of resellers, OEM relationships and systems integrators which accounted for more than 50% of our total product license and first years’ maintenance billings during the years ended December 31, 2010 and 2009. Additionally, our online QlikCommunity provides us with a loyal and growing network of users who promote our software, provide support for other users and contribute valuable insights and feedback for our product development efforts.

To complement QlikView, we have developed a differentiated business model that has the following attributes:

•

Broad User Focus — marketing and selling QlikView directly to the business user by providing an easy-to-use platform that can be used with minimal training

•

Low Risk Rapid Product Adoption — providing a low risk alternative to costly, all-or-nothing, enterprise-wide deployment requirements

•

“Land and Expand” Customer Penetration — initially targeting business users in an organization to create a loyal user base that promotes broad adoption of our software platform across an organization

•

Globally Diversified Distribution Model — employing a multi-pronged international sales approach that leverages a direct sales force and partner network

•

Community-Based Marketing and Support — augmenting our development, marketing and support efforts through our online QlikCommunity.

In evaluating our operating results we focus on the productivity of our sales force, the effectiveness of our local and corporate level marketing, our ability to close opportunities generated by our marketing leads and the competitiveness of our technology. In each of these areas, we have taken steps designed to improve our operating results, including undertaking additional sales training for our sales representatives, hiring more experienced regional sales management, investing further in our corporate website to improve its use as an effective lead generative tool, developing a partner enablement program to focus on the results of our sales partners around the world and expanding our research and development staff with a focus on testing and quality assurance.

From a risk perspective, we have had to deal with the impact of the recessionary global environment during the past several years, although we anticipate that the negative impact of these conditions will continue to moderate. We have faced pricing pressure from some of our larger competitors to which we have attempted to respond by focusing on the value delivered by QlikView in comparison to more traditional business intelligence products, and we believe that this has helped to minimize the loss of potential new business from this pressure. Also, the rapid growth in our business has required the continued hiring of experienced staff across all of our geographic territories. To aid this effort we have focused on improving our local recruiting initiatives, as well as developing further internal training programs to prepare executives for greater responsibilities.

We were founded in Sweden in 1993. From 1993 until 1999, our activities were focused on software research and development that resulted in QlikView’s core technology, and from 1999 until 2004 we focused on the commercialization of our technology primarily in the Nordic market and limited regions of Europe. In late 2004, we reincorporated in Delaware and began to broaden our marketing and sales activities in the U.S. and continued our expansion globally.

In July 2010, we completed our initial public offering (“IPO”) of 12,880,000 shares of common stock at an offering price of $10.00 per share, resulting in net proceeds to us of approximately $115.1 million, after deducting underwriting discounts and offering costs. Offering costs of $4.7 million have been recorded as a reduction of the proceeds received in connection with the IPO. In July 2010, in connection with our IPO, our then outstanding shares of convertible preferred stock were automatically converted into an aggregate of 46,721,424 shares of common stock, and all outstanding warrants to purchase convertible preferred stock were converted into warrants to purchase an aggregate of 474,282 shares of common stock.

Key Financial Metrics and Trends

Revenues

Our revenue is comprised of license, maintenance and professional services. We license our software under perpetual licenses which include one year of maintenance as part of the initial purchase price of the product. License revenue reflects the revenue recognized from sales of licenses to new customers and additional licenses to existing customers. Historically, the majority of our license revenues have come from new customers. However, going forward we seek to increase the contribution from existing customers based upon our “land and expand” sales strategy. Customers can renew, and generally have renewed, their maintenance agreements for a fee that is based upon a percentage of the initial license fee paid. Current customers with maintenance agreements are entitled to receive unspecified upgrades and enhancements when and if they become available. We have experienced growth in maintenance revenue primarily due to increased license sales and growth in our customer base and high retention of those customers. In each of the years ended December 31, 2010 and 2009, our annual maintenance renewal rates exceeded 85%. Professional services revenue is comprised of training, installation and other consulting revenues. Given the ease of implementation of our product and our relationship with our partners, professional services revenue for the years ended December 31, 2010, 2009 and 2008 was 10%, 10%, and 12%, respectively, of total revenues. We do not expect that proportion to change significantly during the near term. Prior to 2009, we generated the majority of sales through our direct sales channel rather than through our partner network. However, the contribution from our partner network continues to grow, and we anticipate that over time revenues from partners will continue to be more than 50% of total revenues. Given the size of the U.S. market and our current limited penetration there, we expect that the U.S. will represent our largest growth opportunity during the near term and will likely be an important contributor to future revenue growth. Due to the global diversity of our customer base, our results are impacted by movements in the currencies of the major territories in which we operate. The primary currencies impacting results are the U.S. dollar (our functional currency), the Swedish kronor, the euro, and the British pound. Inflation and changing prices had no material effect on our sales, revenue or operating income from continuing operations during the years ended December 31, 2010, 2009, and 2008.

Cost of Revenue

Cost of revenue primarily consists of personnel costs, fees paid to subcontractors providing technical support services, referral fees paid to third parties in connection with software license sales and other discrete professional services. Personnel costs include salaries, employee benefit and social costs, bonuses, stock-based compensation and direct overhead.

Operating Expenses

We classify our operating expenses into three categories: sales and marketing, research and development, and general and administrative. Our operating expenses primarily consist of personnel costs, sales commissions, marketing program costs, facilities, legal, accounting, consulting and other professional services costs, and depreciation and amortization. Personnel costs include salaries, employee benefit and social costs, bonuses, stock-based compensation, and direct overhead. Historically, we have focused on the continued growth of our license revenues, and as a result, sales and marketing has represented the largest amount of total expenses both in absolute dollar terms and as a percentage of total revenues. Going forward, we expect to drive greater efficiencies from this cost base and consequently expect that sales and marketing as a percentage of revenues will decline in the long term. Conversely, we project that research and development expenses will remain constant or grow as a percentage of total revenues as we continue to invest in future product enhancements and new products.

Sales and Marketing. Sales and marketing expenses primarily consist of personnel costs for our sales, marketing and business development employees and executives; commissions earned by our sales personnel; facilities costs attributable to our sales and marketing personnel; the cost of marketing programs; and the cost of business development programs. We expect to continue to hire additional sales personnel in the U.S. and in our international locations in 2011.

Research and Development. Research and development expenses primarily consist of personnel and facility costs for our research and development and product marketing employees. We have devoted our development efforts primarily to enhancing the functionality and expanding the capabilities of our software platform, including, for example, the development of our QlikView mobile client (released in 2009). We expect that our research and development expenses will continue to increase in absolute dollars and as a percentage of revenue in the long term as we increase our research and development and product marketing headcount to further strengthen and enhance our software platform. The vast majority of our research and development staff is based in Lund, Sweden.

General and Administrative. General and administrative expenses primarily consist of personnel costs for our executive, finance, legal, human resources, and administrative personnel, as well as the cost of facilities attributable to general and administrative operations, depreciation and amortization, legal, accounting, and other professional services fees and other corporate expenses. We incurred additional costs in 2010 and 2009 and expect to continue to incur higher costs, associated with being a public company, including higher legal, corporate insurance and accounting expenses and the additional costs of achieving and then maintaining compliance with Section 404 of the Sarbanes-Oxley Act and related regulations. We also expect that general and administrative expenses will continue to increase in absolute dollars because of our efforts to expand our international operations, but we believe over time general and administrative costs will decline as a percentage of revenues as we expect to derive greater efficiencies from our corporate infrastructure.

Stock-Based Compensation. Stock-based compensation expense is based on the fair value of those awards at the date of grant. We use the Black-Scholes-Merton (“Black-Scholes”) option pricing model to determine the fair value of stock-based compensation awards. The estimated fair value of stock-based compensation awards on the date of grant is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recorded within cost of revenue, sales and marketing, research and development and general and administrative expenses.

Other Income (Expense), net

Other income (expense), net primarily consists of net interest, change in the fair value of warrants, foreign exchange gains (losses) and other income or expense. Net interest represents interest income received on our cash and cash equivalents and interest expense associated with previously outstanding debt. We expect interest income to increase in periods subsequent to the quarter ended June 30, 2010, due to the proceeds from our IPO which was completed in July 2010. We expect interest expense to decrease in periods subsequent to the quarter ended June 30, 2010, due to the repayment of our outstanding long-term debt in July 2010. Change in the fair value of warrants consists of charges recorded to mark our company’s outstanding preferred and common stock warrants to fair value at each reporting date. In connection with our IPO, our preferred stock warrants were reclassified to additional paid-in capital, and they are no longer required to be classified as a liability and adjusted to their fair market value each period. Foreign exchange gains (losses) relate to the re-measurement of certain transactions, primarily our outstanding note payable with one of our stockholders, which was paid in full in July 2010, and intercompany transactions denominated in currencies other than our functional reporting currency, the U.S. dollar. As a result of our business activities in foreign countries, we expect that foreign exchange gains (losses) will continue to occur due to fluctuations in exchange rates in the countries where we do business.

Provision for Income Taxes

Provision for income taxes primarily consists of corporate income taxes related to profits resulting from the sale of our software platform by our U.S. and international subsidiaries.

Impact of Foreign Currency Translation

Approximately 69%, 73%, and 72% of our operating revenues for the years ended December 31, 2010, 2009, and 2008 were earned in foreign denominated currencies, including the Swedish kronor, euro and British pound. We expect that our exposure to foreign currency exchange risk will increase to the extent we are able to continue to expand our business internationally. For purposes of our consolidated financial statements, local currency assets and liabilities are translated at the rate of exchange to the U.S. dollar on the balance sheet date and local currency revenues and expenses are translated at average rates of exchange to the U.S. dollar during the reporting period. Foreign currency transaction gains (losses) have been reflected as a component of our results from operations and foreign currency translation gains (losses) have been included as a component of accumulated other comprehensive income (loss).

Our operating results for the year ended December 31, 2010 were negatively impacted by the general strengthening of the U.S. dollar relative to the Euro and the British pound offset by weakening of the U.S. dollar relative to the Swedish kronor.

Consolidated Results of Operations

The following table sets forth a summary of our audited consolidated statement of operations for the periods indicated as a percentage of total revenue:

		Year Ended December 31,
		2010				2009				2008
Revenue:
License revenue			64.1	%			63.5	%			62.9	%
Maintenance revenue			26.4				26.3				24.9
Professional services revenue			9.5				10.2				12.2
Total revenues			100.0				100.0				100.0
Cost of revenue:
License revenue			1.6				2.3				2.6
Maintenance revenue			1.8				1.0				1.2
Professional services revenue			7.1				7.5				8.0
Total cost of revenue			10.5				10.8				11.8
Gross profit			89.5				89.2				88.2
Operating expenses:
Sales and marketing			54.0				59.3				62.8
Research and development			6.0				5.6				7.0
General and administrative			17.3				15.9				17.1
Total operating expenses			77.3				80.8				86.9
Income from operations			12.2				8.4				1.3
Other income (expense), net			(3.0	)			(2.9	)			2.8
Income before provision for income taxes			9.2				5.5				4.1
Provision for income taxes			(3.2	)			(1.1	)			(1.6	)
Net income			6.0	%			4.4	%			2.5	%

Comparison of the Years Ended December 31, 2010 and 2009

Revenue

The following table sets forth revenue by source:

		Year Ended December 31,
		2010								2009
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(dollars in thousands)
Revenue
License revenue		$	145,225				64.1	%		$	99,864				63.5	%		$	45,361				45.4	%
Maintenance revenue			59,846				26.4	%			41,390				26.3	%			18,456				44.6	%
Professional services revenue			21,450				9.5	%			16,105				10.2	%			5,345				33.2	%
Total revenue		$	226,521				100.0	%		$	157,359				100.0	%		$	69,162				44.0	%

Revenue was $226.5 million for the year ended December 31, 2010 compared to $157.4 million for the year ended December 31, 2009, an increase of $69.1 million, or 44.0%. License revenue grew by approximately $45.4 million, or 45.4%. All territories reported strong revenue growth, particularly the Americas (includes North America and South America), the United Kingdom and German region (includes Germany, Austria and Switzerland), which grew by 66%, 52% and 29% and contributed an incremental $41.2 million in total revenue. In addition, revenue increased due to our acquisition in January 2010 of a reseller in Japan which provided $2.7 million in incremental revenue during the year ended December 31, 2010. There was no material change in the pricing for our product during the year. Revenue growth was achieved primarily due to volume growth as more customers acquired our product for the first time, along with additional license purchases by our existing customers. Amounts invoiced to existing customers represented a larger share of total billings, approximately 67%, resulting from our “land and expand” sales strategy. Billings from our indirect partner channel for license and first year maintenance increased from 51% during the year ended December 31, 2009 to 55% for the year ended December 31, 2010. We believe that an improving global economic outlook during the year ended December 31, 2010 also contributed to higher revenues as customer demand and their willingness to invest in information technology continued to grow compared to the same period last year. Maintenance revenues grew by approximately 44.6% driven by annual maintenance renewal rates of greater than 85%. Professional services revenue grew by 33.2% in the year ended December 31, 2010 compared to the year ended December 31, 2009 due to growth in consulting and training revenue, resulting from an increase in our customer base. The revenue growth in the year ended December 31, 2010 as compared to the year ended December 31, 2009 may not be indicative of our future revenue growth, if any.

Cost of Revenue and Gross Profit

The following table sets forth cost of revenue for each revenue source:

		Year Ended December 31,
		2010								2009
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(dollars in thousands)
Cost of Revenue:
Cost of license revenue		$	3,670				2.5	%		$	3,663				3.7	%		$	7				0.2	%
Cost of maintenance revenue			3,998				6.7	%			1,635				4.0	%			2,363				144.5	%
Cost of professional services revenue			16,054				74.8	%			11,802				73.3	%			4,252				36.0	%
Total cost of revenue		$	23,722				10.5	%		$	17,100				10.9	%		$	6,622				38.7	%
Gross Profit:
License revenue		$	141,555				97.5	%		$	96,201				96.3	%		$	45,354				47.1	%
Maintenance revenue			55,848				93.3	%			39,755				96.0	%			16,093				40.5	%
Professional services revenue			5,396				25.2	%			4,303				26.7	%			1,093				25.4	%
Total gross profit		$	202,799				89.5	%		$	140,259				89.1	%		$	62,540				44.6	%

Cost of revenue was $23.7 million for the year ended December 31, 2010 compared to $17.1 million for the year ended December 31, 2009, an increase of $6.6 million, or 38.7%. Overall cost of revenue declined as a percentage of revenue from 10.9% for the year ended December 31, 2009 to 10.5% for the year ended December 31, 2010. Cost of license revenue largely consists of referral fees paid to third parties in connection with software license sales. Referral fees were flat year over year due to less referral fees paid for software license sales in 2010. In anticipation of continued growth in our current customer base, we increased headcount in our support organization which increased personnel costs by $1.6 million for the year ended December 31, 2010 as compared to the same period in 2009. Fees paid to referral partners for license revenues remained flat for the year ended December 31, 2010 compared to the year ended December 31, 2009. Cost of professional services revenue increased by $4.2 million largely due to increased personnel costs of $4.6 million. These increases were offset by a decrease in other costs of professional services of $0.4 million. The growth in our gross profit in the year ended December 31, 2010 as compared to the year ended December 31, 2009 may not be indicative of our future gross profit growth, if any.

Operating Expenses

The following table sets forth operating expenses as a percentage of revenue:

		Year Ended December 31,
		2010								2009
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(dollars in thousands)
Operating expenes:
Sales and marketing		$	122,394				54.0	%		$	93,349				59.3	%		$	29,045				31.1	%
Research and development			13,537				6.0	%			8,735				5.6	%			4,802				55.0	%
General and adminstrative			39,300				17.3	%			25,009				15.9	%			14,291				57.1	%
Total operating expenses		$	175,231				77.3	%		$	127,093				80.8	%		$	48,138				37.9	%

Sales and Marketing. Sales and marketing expenses increased $29.0 million, or 31.1%, but declined as a percentage of revenues, reflecting an increase in revenue achieved per sales representative, an increased percentage of sales from existing customers, and an increased percentage of sales from partners. The increase in sales and marketing expenses was primarily attributable to an increase in personnel and commission costs of $22.7 million (including a $0.8 million increase in stock-based compensation), an increase in travel expenses of $2.8 million, $0.5 million of severance costs, $0.2 million of marketing costs, and $2.8 million of consulting and other sales and marketing costs.

Research and Development. Research and development expenses grew by approximately $4.8 million or 55.0% during the year ended December 31, 2010 as compared to the year ended December 31, 2009. The increase was attributable to higher personnel costs of $3.1 million as a result of the increase in our headcount in research and development and an increase in other expenses such as facilities and travel related to a larger research and development function of $1.3 million. The remaining increase of $0.4 million was due to changes in the value of the Swedish kronor as the vast majority of our research and development staff is based in Lund, Sweden.

General and Administrative. General and administrative expenses were $39.3 million for the year ended December 31, 2010 compared to $25.0 million for the year ended December 31, 2009, an increase of $14.3 million, or 57.1%. This increase was due primarily to a $4.9 million increase in personnel costs (including $0.6 million increase in stock-based compensation) to build out our corporate level functions to support anticipated global growth and meet the demands and compliance responsibilities of a U.S. public company. We began incurring additional public company costs, such as accounting and legal fees and directors and officers insurance, totaling $2.8 million during the year ended December 31, 2010, including $0.6 million of secondary offering costs. This increase was also due to a $1.6 million increase in travel expenses primarily related to our annual employee summit and increase in headcount, a $0.1 million increase in facility and infrastructure costs to support international expansion and an increase in professional fees, such as legal and consulting, and other general and administrative costs of $4.9 million related in part due to our increased headcount.

Other Income (Expense), net. Other expense was $6.9 million for the year ended December 31, 2010 compared to expense of $4.5 million for the year ended December 31, 2009. We had a $4.4 million foreign exchange loss and other expense for the year ended December 31, 2010 compared to a loss of $1.6 million for the year ended December 31, 2009. The increase is largely due to the foreign currency impact of the U.S. dollar generally weakening relative to the Swedish kronor during the year ended December 31, 2010. This increase was offset by a decrease in net interest expense of $0.4 million primarily due to the prepayment of our outstanding note payable balance in July 2010.

Provision for Income Taxes. Our annual effective tax rate for the year ended December 31, 2010 was 34.8%, which results in a provision for income taxes of approximately $7.2 million. The effective tax rate increased from the 2009 annual effective tax rate of 20.6% due primarily to a change in the amount of income earned in the various locations where we operate from one year to the next, a change in the valuation allowance for deferred tax assets, charges recorded for the change in value of our preferred stock warrants and stock-based compensation expense incurred by our U.S. holding company. We operate in an international environment with significant operations in various locations outside of the U.S. Accordingly, the consolidated income tax rate is a composite rate reflecting our earnings (losses) and the applicable tax rates in the various locations where we operate.

Comparison of the Years Ended December 31, 2009 and 2008

Revenue

		Year Ended December 31,
		2009								2008
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(dollars in thousands)
Revenue:
License revenue		$	99,864				63.5	%		$	74,446				62.9	%		$	25,418				34.1	%
Maintenance revenue			41,390				26.3	%			29,401				24.9	%			11,989				40.8	%
Professional services revenue			16,105				10.2	%			14,417				12.2	%			1,688				11.7	%
Total revenue		$	157,359				100.0	%		$	118,264				100.0	%		$	39,095				33.1	%

Revenue was $157.4 million in 2009 compared to $118.3 million in 2008, an increase of $39.1 million, or 33.1%. License revenue grew by approximately $25.4 million, or 34%. All territories showed strong revenue growth, particularly Spain and France, which in their second full year of operations as a direct sales office grew 72% and 96%, contributing an incremental $7.3 million in total revenue. We also grew revenue by $9.0 million, or 27%, in our largest market, North America, and saw growing contributions from relatively new markets in Eastern Europe and a brand new market, Japan, which provided $1.7 million in incremental license revenue. Although we introduced a new version of QlikView in 2009, there was no material increase in the pricing for our product. Revenue growth was achieved primarily due to volume growth as more customers acquired our product for the first time, along with additional license purchases by our existing customers. From a performance perspective, we experienced an increasing contribution from existing customers, approximately 58% of license revenues, which resulted from our “land and expand” sales strategy and greater productivity from our sales representatives with revenue per representative growing 38%. We believe that a better global economic outlook also contributed to higher revenues as customer demand and their willingness to invest in information technology grew over the course of the year, with the majority of our growth for 2009 coming in the third and fourth quarters of the fiscal year. Maintenance revenues grew by approximately 41% driven by annual maintenance renewal rates of greater than 85%. As a percentage of total revenues, maintenance grew to 26% in 2009 from 25% in 2008, reflecting the impact of the growing installed customer base and renewal rates. Professional services revenue grew by 12% and was approximately 10% of our total revenues.

Cost of Revenue and Gross Profit

		Year Ended December 31,
		2009								2008
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(dollars in thousands)
Cost of Revenue:
Cost of license revenue		$	3,663				3.7	%		$	3,071				4.1	%		$	592				19.3	%
Cost of maintenance revenue			1,635				4.0	%			1,365				4.6	%			270				19.8	%
Cost of professional services revenue			11,802				73.3	%			9,562				66.3	%			2,240				23.4	%
Total cost of revenue		$	17,100				10.9	%		$	13,998				11.8	%		$	3,102				22.2	%
Gross Profit:
License revenue		$	96,201				96.3	%		$	71,375				95.9	%		$	24,826				34.8	%
Maintenance revenue			39,755				96.0	%			28,036				95.4	%			11,719				41.8	%
Professional services revenue			4,303				26.7	%			4,855				33.7	%			(552	)			-11.4	%
Total gross profit		$	140,259				89.1	%		$	104,266				88.2	%		$	35,993				34.5	%

Cost of revenue was $17.1 million in 2009 compared to $14.0 million in 2008, an increase of $3.1 million, or 22.2%. Overall cost of revenue declined as a percent of revenue from 11.8% in 2008 to 10.9% in 2009, despite a decrease in our margin related to professional services. In anticipation of continued growth in our installed customer base, we increased headcount in our professional services organization which increased costs by $1.5 million in 2009, but we did not achieve a corresponding increase in related revenues, reducing our gross margin in the category to 26.7% from 33.7%. In addition, fees paid to subcontractors increased by $0.9 million. Fees paid to referral partners for license revenues increased by $0.6 million in 2009 due to a significant transaction.

Operating Expenses

		Year Ended December 31,
		2009								2008
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(dollars in thousands)
Operating expenes:
Sales and marketing		$	93,349				59.3	%		$	74,267				62.8	%		$	19,082				25.7	%
Research and development			8,735				5.6	%			8,258				7.0	%			477				5.8	%
General and adminstrative			25,009				15.9	%			20,190				17.1	%			4,819				23.9	%
Total operating expenses		$	127,093				80.8	%		$	102,715				86.9	%		$	24,378				23.7	%

Sales and Marketing. Sales and marketing expenses increased $19.1 million, or 25.7%, but declined as a percentage of revenues, reflecting an increase in revenue achieved per sales representative and an increased percentage of sales from existing customers and through partners. The increase was primarily attributable to an increase in personnel and commission costs of $12.9 million (including a $0.5 million increase in stock-based compensation), an increase in costs related to marketing programs of $2.4 million, an increase in facility and other infrastructure costs of $2.6 million and an increase in travel expenses of $0.9 million. Also in 2009, we implemented an online customer relationship management tool to facilitate sales force growth. We expect sales and marketing expenses to continue to increase in absolute dollars but to decrease as a percentage of revenues over time as we continue to expand our sales force and marketing activities.

Research and Development. Although total research and development headcount increased during this period, total research and development expenses grew by only $0.5 million or 5.8%. With the vast majority of our related staff based in Lund, Sweden, changes in the value of the Swedish kronor reduced the impact of the staff increase by approximately $0.8 million. To accommodate the increase in our research and development staff, we made further investment in our facility in Sweden of approximately $0.2 million. We expect our research and development expenses will continue to increase in absolute dollars and as a percentage of revenue in the long term as we increase our research and development headcount to further strengthen and enhance our software platform.

General and Administrative. General and administrative expenses were $25.0 million in 2009 compared to $20.2 million in 2008, an increase of $4.8 million, or 23.9%. This increase was due primarily to a $2.3 million increase in personnel costs to build out our corporate level functions to support anticipated global growth and prepare for being a publicly traded company. This increase was also due to a $1.2 million increase in travel expenses, a $0.2 million increase in stock-based compensation expense, a $0.5 million increase in facility and infrastructure costs to support international expansion, and an increase in depreciation and amortization of $0.3 million related in part to additional investment in property and equipment due to our increased headcount. We expect that general and administrative expenses will continue to increase in absolute dollars because of our efforts to expand our international operations and due to costs to be incurred in connection with our initial public offering, this offering and ongoing public company related costs. However, we believe over time general and administrative costs will decline as a percentage of revenues as we will derive greater efficiencies from our corporate infrastructure.

Other Income (Expense), net

Other income (expense), net was an expense of $4.5 million in 2009 compared to income of $3.3 million in 2008. The change consisted of increased interest expense, charges for our common and preferred stock warrants and foreign exchange. Interest expense increased due to a full year of interest expense on our term loan. During the year ended December 31, 2009, the change in the fair value of the stock warrants increased by $1.5 million in a manner consistent with the increased value in our common stock. We had a $1.6 million foreign exchange loss in 2009 compared to a gain of $4.2 million in 2008. The change is principally due to the foreign currency impact of our outstanding debt as a result of the U.S. dollar generally weakening relative to the Swedish kronor in 2009 compared to generally strengthening in 2008.

Provision for Income Taxes

Our provision for income taxes in 2009 was consistent with the provision for income taxes in 2008. The increase in our income before income taxes of $3.8 million from 2008 to 2009 was offset by a decrease in our effective tax rate from 38% in 2008 to 21% in 2009 as a result of current year reversal of valuation allowance in certain jurisdictions and a more significant impact of earnings from foreign operations.

Foreign Exchange Rates

We conduct business in our foreign operations in local currencies. Accordingly, our revenue and operating expense results presented above are affected by changes in foreign exchange rates. Income and expense accounts are translated at the average monthly exchange rates during the period. As a result, a decline in the value of the U.S. dollar relative to the local currencies of our foreign subsidiaries can have a favorable effect on our profitability, and an increase in the value of the U.S. dollar relative to the local currencies of foreign subsidiaries can have a negative effect on our profitability.

Seasonality

Our quarterly results reflect seasonality in the sale of our products and services. Historically, a pattern of increased license sales in the fourth quarter has positively impacted sales activity in that period which can make it difficult to achieve sequential revenue growth in the first quarter. Similarly, our gross margins and operating income have been affected by these historical trends because the majority of our expenses are relatively fixed in the near-term. The timing of revenues in relation to our expenses, much of which does not vary directly with revenue, has an impact on the cost of revenue, sales and marketing expense, research and development expense, and general and administrative expense as a percentage of revenue in each calendar quarter during the year. The majority of our expenses are personnel-related and include salaries, stock-based compensation, benefits, and incentive-based compensation plan expenses. As a result, we have not experienced significant seasonal fluctuations in the timing of expenses from period to period, other than an increase in general and administrative expenses during the first quarter of each year as a result of our annual employee summit and an increase in sales and marketing expenses in the second quarter of each year due to our annual partner event. On a quarterly basis, we have usually generated the majority of our revenues in the final month of each quarter and a significant amount in the last two weeks of a quarter. We believe this is due to customer buying patterns typical in this industry. Although these seasonal factors are common in the technology sector, historical patterns should not be considered a reliable indicator of our future sales activity or performance.

Acquisitions

In January 2008, in order to achieve a direct sales presence in Spain, we acquired the operations and tangible assets of P.C. Compatible Business Intelligence, S.L., or PCB, a Spanish reseller of our product, for $1.9 million, including cash of $0.4 million and a warrant to purchase an aggregate of 93,981 shares of our common stock at an exercise price of $1.65 per share. PCB had the right to exercise such warrant until December 31, 2010 and to require us to purchase the acquired shares for an aggregate of €1.8 million (approximately $2.4 million based on an assumed exchange rate of approximately $1.33 as of December 31, 2010). This right expired on December 31, 2010.

In January 2010, in order to achieve a direct sales presence in Japan, we acquired all of the issued and outstanding shares of Syllogic Corporation, or Syllogic, a Japanese reseller of our product, for 120,000 shares of our common stock plus contingent cash consideration not to exceed $0.8 million. The total estimated purchase price of Syllogic was $1.1 million.

We account for acquisitions using the purchase method of accounting. In each case, we allocated the purchase price to the assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition.

Liquidity and Capital Resources

Since our inception, we have financed our operations through the sale of preferred stock and common stock, cash flows generated by operations and borrowings under debt instruments. As of December 31, 2010, we had cash and cash equivalents totaling $158.7 million, net accounts receivable of $85.4 million, and $149.1 million of working capital.

Our capital expenditures for 2010 were $2.7 million, comprised primarily of additional leasehold improvements, furniture and fixtures, and computer equipment. We believe that our existing cash and cash equivalents and our cash flow from operations will be sufficient to fund our operations and our capital expenditures for at least the next 12 months. 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 and extent of spending to support product development efforts and expansion into new territories, the timing of introductions of new software products and enhancements to existing software products and the continuing market acceptance of our software offerings. We may from time to time enter into agreements, arrangements or letters of intent regarding potential investments in, or acquisitions of, complementary businesses, applications or technologies, which could require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us or at all.

We have begun incurring costs as a public company that we had not previously incurred, including, but not limited to, costs and expenses for directors fees, increased directors and officers insurance, investor relations fees, expenses for compliance with the Sarbanes-Oxley Act of 2002 and rules implemented by the SEC and Nasdaq, the exchange, on which our common stock is listed, and various other costs. The Sarbanes-Oxley Act of 2002 requires annual management assessment of the effectiveness of our internal control over financial reporting.

The following table shows selected balance sheet data as well as our cash flows from operating activities, investing activities, and financing activities for the stated periods:

		December 31,				December 31,
		2010				2009
		(dollars in thousands)
Cash and cash equivalents		$	158,712			$	24,852
Accounts receivable, net			85,364				63,729