we generate a significant portion of sales through our channel partners , including managed service providers , value-added resellers and consulting firms in the united states and internationally . we have had strong revenue growth over the past three years . our revenues increased from $ 65.4 million in 2010 to $ 76.2 million in 2011 , and reached $ 91.4 million in 2012 , representing period-over-period increases of $ 10.8 million , and $ 15.2 million , or 16 % and 20 % , respectively . we generated net income of $ 0.8 million in 2010 , $ 2.0 million in 2011 , and $ 2.3 million in 2012 . 41 on september 28 , 2012 , our common stock commenced trading on the nasdaq stock market under the trading symbol “ qlys , ” and on october 3 , 2012 we closed our initial public offering . in our initial public offering , we sold and issued 7,836,250 shares and certain selling stockholders sold an additional 875,000 shares . the net proceeds to us from the offering were approximately $ 87.5 million , after deducting underwriting discounts and commissions , and before deducting total expenses in connection with this offering of $ 2.9 million . key metrics in addition to measures of financial performance presented in our consolidated financial statements , we monitor the key metrics set forth below to help us evaluate growth trends , establish budgets , measure the effectiveness of our sales and marketing efforts , and assess operational efficiencies . four-quarter bookings we monitor four-quarter bookings , a non-gaap financial measure , which is calculated as revenues for the preceding four quarters plus the change in current deferred revenues for the same period . we believe this metric provides an additional tool for investors to use in assessing our business performance in a way that more fully reflects current business trends than reported revenues and reduces the variations in any particular quarter caused by customer subscription renewals . we believe four-quarter bookings reflects the material sales trends for our business because it includes sales of subscriptions to new customers , as well as subscription renewals and upsells of additional subscriptions to existing customers . since over 80 % of our subscriptions are one year in length , we use current deferred revenues in this metric in order to focus on revenues to be generated over the next four quarters and to exclude the impact of multi-year subscriptions . under our revenue recognition policy , we record subscription fees as deferred revenues and recognize revenues ratably over the subscription periods . for this reason , substantially all of our revenues for a period are typically generated from subscriptions commencing in prior periods . in addition , subscription renewals may vary during the year based on the date of our customers ' original subscriptions , customer requests to modify subscription periods or other factors . see the section titled “ selected consolidated financial and other data-non-gaap financial measures ” for a reconciliation of revenues to four-quarter bookings . replace_table_token_9_th adjusted ebitda we monitor adjusted ebitda , a non-gaap financial measure , to analyze our financial results and believe that it is useful to investors , as a supplement to u.s. gaap measures , in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance . we believe that adjusted ebitda helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that we exclude in adjusted ebitda . furthermore , we use this measure to establish budgets and operational goals for managing our business and evaluating our performance . we also believe that adjusted ebitda provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry . see the section titled “ selected consolidated financial and other data - non-gaap financial measures ” for a reconciliation of net income to adjusted ebitda , adjusted ebitda should not be considered in isolation from , or as a substitute for , financial information prepared in accordance with u.s. gaap . we calculate adjusted ebitda as net income before ( 1 ) other ( income ) expense , net , which includes interest income , interest expense and other income and expense , ( 2 ) provision for income taxes , ( 3 ) depreciation and amortization of property and equipment , ( 4 ) amortization of intangible assets and ( 5 ) stock-based compensation . 42 replace_table_token_10_th key components of results of operations revenues we derive revenues from the sale of subscriptions to our security and compliance solutions , which are delivered on our cloud platform . we generate the substantial majority of our revenues through the sale of subscriptions to our qualysguard vulnerability management solution , and we also have a growing number of customers who have purchased our additional solutions . subscriptions to our solutions allow customers to access our cloud security and compliance solutions through a unified , web-based interface . customers generally enter into one year renewable subscriptions . the subscription fee entitles the customer to an unlimited number of scans for a specified number of networked devices or web applications and , if requested by a customer as part of their subscription , a specified number of physical or virtual scanner appliances . our physical and virtual scanner appliances are requested by certain customers as part of their subscriptions in order to scan it infrastructures within their firewalls and do not function without , and are not sold separately from , subscriptions for our solutions . customers are required to return physical scanner appliances if they do not renew their subscriptions . we typically invoice our customers for the entire subscription amount at the start of the subscription term . story_separator_special_tag in some limited cases , we also provide certain computer equipment used to extend our qualysguard cloud platform into our customers ' private cloud environment . customers generally enter into one year renewable annual subscriptions . we assess the ability to separate multiple deliverables in accordance with the relevant accounting literature . 52 we recognize revenues when all of the following conditions are met : ( a ) there is persuasive evidence of an arrangement ; ( b ) the service has been provided to the customer ; ( c ) the collection of the fees is reasonably assured ; and ( d ) the amount of fees to be paid by the customer is fixed or determinable . subscriptions for unlimited scans and certain limited scan arrangements with firm expiration dates are recognized ratably over the period in which the services are performed , generally one year . we recognize revenues for certain other limited scan arrangements , where expiration dates can be extended , on an as-used basis . we recognize the subscription of physical scanner appliances and other computer equipment as revenues ratably over the period of the subscription , which is commensurate with the term of the related subscription . because the customer 's access to our cloud solutions are delivered at the same time or within close proximity to the delivery of physical scanner appliances and the terms are commensurate for these services and equipment , we consider these elements as a single unit of accounting recognized ratably over the subscription term . costs of shipping and handling charges associated with physical scanner appliances and other computer equipment are included in cost of revenues . deferred revenues consist of revenues billed or received that will be recognized in the future under subscriptions existing at the balance sheet date . goodwill and intangibles goodwill represents the excess of the aggregate purchase price paid over the fair value of the net tangible and identifiable intangible assets acquired . goodwill and other intangible assets are not amortized and are tested for impairment at least annually or whenever events or changes in circumstances indicate that the fair value is less than carrying value . we have determined that we operate in one reporting unit . we performed qualitative assessments for 2012 of our single reporting unit and of our intangible assets not subject to amortization . these assessments did not indicate that it is more likely than not that the reporting unit fair value or the intangible assets fair value is less than their carrying values , and concluded there was no impairment of goodwill or intangible assets not subject to amortization . the goodwill balance was $ 0.3 million and the balance of intangible assets not subject to amortization was $ 0.3 million as of december 31 , 2012 and 2011 . no impairment of goodwill or intangible assets not subject to amortization was recorded for 2012 , 2011 or 2010 . income taxes we are subject to taxes in the united states as well as other tax jurisdictions in which we conduct business . earnings from our non-u.s. activities are subject to local income tax and may be subject to u.s. income tax . income taxes are accounted for under the asset and liability method . deferred tax assets and liabilities are recognized for the tax impact of timing differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards . deferred tax assets and liabilities are measured using statutory tax rates and laws expected to apply to taxable income in the years in which those temporary differences are expected to reverse . the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period in which the statutory rate change is enacted in law . as of december 31 , 2012 , we had recorded a valuation allowance on our net deferred tax assets . in assessing the recoverability of deferred tax assets , management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized . the realization of deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences such as loss carry-forwards and tax credits become deductible . management considers projected future taxable income and tax planning strategies in making this assessment and ensuring that the deferred tax asset valuation allowance is adjusted as appropriate . as of december 31 , 2012 , based on the accumulation of negative evidence , such as inconsistent quarterly earnings , including operating losses in the three months ended december 31 , 2011 , march 31 , 2012 and june 30 , 2012 , continued heavy investment in research and development activities and in our infrastructure , and international expansion , management determined it was not more likely than not that the benefits of our deferred tax assets will be realized . if we determine in the future that we will be able to realize all or a portion of our net operating loss or tax credit carryforwards and other deferred tax assets , an adjustment to our net operating loss or tax credit carryforwards and other deferred tax assets would increase net income in the period in which we make such a determination . we have assessed our income tax positions and recognized tax benefits for all years subject to examination , based upon evaluation of the facts , circumstances and information available at the end of each period . we recognize tax benefits from uncertain tax positions when it is more likely than not that the position will be sustained 53 upon examination , including resolutions of any related appeals or litigation processes , based on the technical merits of the position . we record interest and penalties related to unrecognized tax benefits in our provision

cash flows the following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this report : replace_table_token_26_th 50 cash flows from operating activities in 2012 , operating activities provided $ 22.0 million in cash related to an increase of $ 13.7 million in deferred revenues , attributable to increased collections from customers and an increase in subscriptions exceeding one year and net income of $ 2.3 million , adjusted by non-cash items including depreciation and amortization of $ 7.3 million and stock-based compensation of $ 3.5 million . these sources of cash were partially offset by an increase of $ 4.0 million in accounts receivable due to the overall growth of our business and a decrease of $ 1.4 million in accounts payable and accrued liabilities due to the timing of payments . in 2011 , operating activities provided $ 17.2 million in cash as a result of net income of $ 2.0 million , adjusted by non-cash items , including depreciation and amortization of $ 5.4 million and stock-based compensation of $ 2.1 million . working capital sources of cash were related to an increase of $ 11.9 million in deferred revenues , attributable to increased collections from customers and subscriptions exceeding one year , a $ 4.1 million increase in accounts payable and accrued liabilities primarily related to increased headcount and operations , and a $ 1.7 million increase in other non-current liabilities related to obligations for multi-year maintenance and support agreements for third-party licensed technology .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```cash flows the following summary of cash flows for the periods indicated has been derived from our consolidated financial statements included elsewhere in this report : replace_table_token_26_th 50 cash flows from operating activities in 2012 , operating activities provided $ 22.0 million in cash related to an increase of $ 13.7 million in deferred revenues , attributable to increased collections from customers and an increase in subscriptions exceeding one year and net income of $ 2.3 million , adjusted by non-cash items including depreciation and amortization of $ 7.3 million and stock-based compensation of $ 3.5 million . these sources of cash were partially offset by an increase of $ 4.0 million in accounts receivable due to the overall growth of our business and a decrease of $ 1.4 million in accounts payable and accrued liabilities due to the timing of payments . in 2011 , operating activities provided $ 17.2 million in cash as a result of net income of $ 2.0 million , adjusted by non-cash items , including depreciation and amortization of $ 5.4 million and stock-based compensation of $ 2.1 million . working capital sources of cash were related to an increase of $ 11.9 million in deferred revenues , attributable to increased collections from customers and subscriptions exceeding one year , a $ 4.1 million increase in accounts payable and accrued liabilities primarily related to increased headcount and operations , and a $ 1.7 million increase in other non-current liabilities related to obligations for multi-year maintenance and support agreements for third-party licensed technology .
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 Suspicious Activity Report : we generate a significant portion of sales through our channel partners , including managed service providers , value-added resellers and consulting firms in the united states and internationally . we have had strong revenue growth over the past three years . our revenues increased from $ 65.4 million in 2010 to $ 76.2 million in 2011 , and reached $ 91.4 million in 2012 , representing period-over-period increases of $ 10.8 million , and $ 15.2 million , or 16 % and 20 % , respectively . we generated net income of $ 0.8 million in 2010 , $ 2.0 million in 2011 , and $ 2.3 million in 2012 . 41 on september 28 , 2012 , our common stock commenced trading on the nasdaq stock market under the trading symbol “ qlys , ” and on october 3 , 2012 we closed our initial public offering . in our initial public offering , we sold and issued 7,836,250 shares and certain selling stockholders sold an additional 875,000 shares . the net proceeds to us from the offering were approximately $ 87.5 million , after deducting underwriting discounts and commissions , and before deducting total expenses in connection with this offering of $ 2.9 million . key metrics in addition to measures of financial performance presented in our consolidated financial statements , we monitor the key metrics set forth below to help us evaluate growth trends , establish budgets , measure the effectiveness of our sales and marketing efforts , and assess operational efficiencies . four-quarter bookings we monitor four-quarter bookings , a non-gaap financial measure , which is calculated as revenues for the preceding four quarters plus the change in current deferred revenues for the same period . we believe this metric provides an additional tool for investors to use in assessing our business performance in a way that more fully reflects current business trends than reported revenues and reduces the variations in any particular quarter caused by customer subscription renewals . we believe four-quarter bookings reflects the material sales trends for our business because it includes sales of subscriptions to new customers , as well as subscription renewals and upsells of additional subscriptions to existing customers . since over 80 % of our subscriptions are one year in length , we use current deferred revenues in this metric in order to focus on revenues to be generated over the next four quarters and to exclude the impact of multi-year subscriptions . under our revenue recognition policy , we record subscription fees as deferred revenues and recognize revenues ratably over the subscription periods . for this reason , substantially all of our revenues for a period are typically generated from subscriptions commencing in prior periods . in addition , subscription renewals may vary during the year based on the date of our customers ' original subscriptions , customer requests to modify subscription periods or other factors . see the section titled “ selected consolidated financial and other data-non-gaap financial measures ” for a reconciliation of revenues to four-quarter bookings . replace_table_token_9_th adjusted ebitda we monitor adjusted ebitda , a non-gaap financial measure , to analyze our financial results and believe that it is useful to investors , as a supplement to u.s. gaap measures , in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance . we believe that adjusted ebitda helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that we exclude in adjusted ebitda . furthermore , we use this measure to establish budgets and operational goals for managing our business and evaluating our performance . we also believe that adjusted ebitda provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry . see the section titled “ selected consolidated financial and other data - non-gaap financial measures ” for a reconciliation of net income to adjusted ebitda , adjusted ebitda should not be considered in isolation from , or as a substitute for , financial information prepared in accordance with u.s. gaap . we calculate adjusted ebitda as net income before ( 1 ) other ( income ) expense , net , which includes interest income , interest expense and other income and expense , ( 2 ) provision for income taxes , ( 3 ) depreciation and amortization of property and equipment , ( 4 ) amortization of intangible assets and ( 5 ) stock-based compensation . 42 replace_table_token_10_th key components of results of operations revenues we derive revenues from the sale of subscriptions to our security and compliance solutions , which are delivered on our cloud platform . we generate the substantial majority of our revenues through the sale of subscriptions to our qualysguard vulnerability management solution , and we also have a growing number of customers who have purchased our additional solutions . subscriptions to our solutions allow customers to access our cloud security and compliance solutions through a unified , web-based interface . customers generally enter into one year renewable subscriptions . the subscription fee entitles the customer to an unlimited number of scans for a specified number of networked devices or web applications and , if requested by a customer as part of their subscription , a specified number of physical or virtual scanner appliances . our physical and virtual scanner appliances are requested by certain customers as part of their subscriptions in order to scan it infrastructures within their firewalls and do not function without , and are not sold separately from , subscriptions for our solutions . customers are required to return physical scanner appliances if they do not renew their subscriptions . we typically invoice our customers for the entire subscription amount at the start of the subscription term . story_separator_special_tag in some limited cases , we also provide certain computer equipment used to extend our qualysguard cloud platform into our customers ' private cloud environment . customers generally enter into one year renewable annual subscriptions . we assess the ability to separate multiple deliverables in accordance with the relevant accounting literature . 52 we recognize revenues when all of the following conditions are met : ( a ) there is persuasive evidence of an arrangement ; ( b ) the service has been provided to the customer ; ( c ) the collection of the fees is reasonably assured ; and ( d ) the amount of fees to be paid by the customer is fixed or determinable . subscriptions for unlimited scans and certain limited scan arrangements with firm expiration dates are recognized ratably over the period in which the services are performed , generally one year . we recognize revenues for certain other limited scan arrangements , where expiration dates can be extended , on an as-used basis . we recognize the subscription of physical scanner appliances and other computer equipment as revenues ratably over the period of the subscription , which is commensurate with the term of the related subscription . because the customer 's access to our cloud solutions are delivered at the same time or within close proximity to the delivery of physical scanner appliances and the terms are commensurate for these services and equipment , we consider these elements as a single unit of accounting recognized ratably over the subscription term . costs of shipping and handling charges associated with physical scanner appliances and other computer equipment are included in cost of revenues . deferred revenues consist of revenues billed or received that will be recognized in the future under subscriptions existing at the balance sheet date . goodwill and intangibles goodwill represents the excess of the aggregate purchase price paid over the fair value of the net tangible and identifiable intangible assets acquired . goodwill and other intangible assets are not amortized and are tested for impairment at least annually or whenever events or changes in circumstances indicate that the fair value is less than carrying value . we have determined that we operate in one reporting unit . we performed qualitative assessments for 2012 of our single reporting unit and of our intangible assets not subject to amortization . these assessments did not indicate that it is more likely than not that the reporting unit fair value or the intangible assets fair value is less than their carrying values , and concluded there was no impairment of goodwill or intangible assets not subject to amortization . the goodwill balance was $ 0.3 million and the balance of intangible assets not subject to amortization was $ 0.3 million as of december 31 , 2012 and 2011 . no impairment of goodwill or intangible assets not subject to amortization was recorded for 2012 , 2011 or 2010 . income taxes we are subject to taxes in the united states as well as other tax jurisdictions in which we conduct business . earnings from our non-u.s. activities are subject to local income tax and may be subject to u.s. income tax . income taxes are accounted for under the asset and liability method . deferred tax assets and liabilities are recognized for the tax impact of timing differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards . deferred tax assets and liabilities are measured using statutory tax rates and laws expected to apply to taxable income in the years in which those temporary differences are expected to reverse . the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period in which the statutory rate change is enacted in law . as of december 31 , 2012 , we had recorded a valuation allowance on our net deferred tax assets . in assessing the recoverability of deferred tax assets , management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized . the realization of deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences such as loss carry-forwards and tax credits become deductible . management considers projected future taxable income and tax planning strategies in making this assessment and ensuring that the deferred tax asset valuation allowance is adjusted as appropriate . as of december 31 , 2012 , based on the accumulation of negative evidence , such as inconsistent quarterly earnings , including operating losses in the three months ended december 31 , 2011 , march 31 , 2012 and june 30 , 2012 , continued heavy investment in research and development activities and in our infrastructure , and international expansion , management determined it was not more likely than not that the benefits of our deferred tax assets will be realized . if we determine in the future that we will be able to realize all or a portion of our net operating loss or tax credit carryforwards and other deferred tax assets , an adjustment to our net operating loss or tax credit carryforwards and other deferred tax assets would increase net income in the period in which we make such a determination . we have assessed our income tax positions and recognized tax benefits for all years subject to examination , based upon evaluation of the facts , circumstances and information available at the end of each period . we recognize tax benefits from uncertain tax positions when it is more likely than not that the position will be sustained 53 upon examination , including resolutions of any related appeals or litigation processes , based on the technical merits of the position . we record interest and penalties related to unrecognized tax benefits in our provision

