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     121  0 Kommentare Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2023 Financial Results

    Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for financial services, today announced results for its fourth quarter and full year ending December 31, 2023.

    GAAP Results for the Fourth Quarter and Full-Year 2023

    • Revenue for the fourth quarter of $162.1 million, up 11 percent year-over-year and up 5 percent from the third quarter of 2023. Full-year 2023 revenue of $624.6 million, up 10 percent year-over-year.
    • GAAP gross margin for the fourth quarter of 50.2 percent, up from 45.2 percent for the prior-year quarter and up from 47.8 percent for the third quarter of 2023. GAAP gross margin for full-year 2023 of 48.5 percent, up from 45.3 percent for the full-year 2022.
    • GAAP net loss for the fourth quarter of $18.1 million, compared to GAAP net losses of $32.4 million for the prior-year quarter and $23.2 million for the third quarter of 2023. GAAP net loss for full-year 2023 of $65.4 million, compared to $109.0 million for full-year 2022.

    Non-GAAP Results for the Fourth Quarter and Full-Year 2023

    • Non-GAAP revenue for the fourth quarter of $162.2 million, up 11 percent year-over-year and up 5 percent from the third quarter of 2023. Full-year 2023 non-GAAP revenue of $625.0 million, up 10 percent year-over-year.
    • Non-GAAP gross margin for the fourth quarter of 56.0 percent, up from the prior-year quarter of 51.5 percent and up from 53.9 percent for the third quarter of 2023. Non-GAAP gross margin for full-year 2023 of 54.5 percent, up from 51.6 percent for full-year 2022.
    • Adjusted EBITDA for the fourth quarter of $23.2 million, up from $8.4 million for the prior-year quarter and $19.7 million for the third quarter of 2023. Full-year 2023 adjusted EBITDA of $76.9 million, up from $36.9 million for the full-year 2022.

    For a reconciliation of our GAAP to non-GAAP results, please see the tables below.

    “We closed out 2023 with our best bookings performance in company history, which included our two largest deals ever,” said Q2 CEO Matt Flake. “Our customers' focus on deposit growth drove heightened demand for our solutions throughout 2023, and our competitive differentiation enabled us to make 2023 a record year that included our highest-ever net new bookings, renewals, and backlog growth. This, coupled with our marked improvements in profitability expansion in the year, gives me confidence in our trajectory for 2024 and beyond.”

    Fourth Quarter Highlights

    • Signed four Tier 1 digital banking contracts including (a):
    • Top 10 U.S. Credit Union to utilize our retail solutions;
    • Three banks to utilize our commercial and small business solutions.
    • Signed a new Top 4 U.S. bank to a relationship pricing solution contract.
    • Signed an expansion deal with an existing Top 4 U.S. bank customer to further utilize our relationship pricing solutions.
    • Subscription Annualized Recurring Revenue increased to $593.9 million, up 19 percent year-over-year from $500.9 million at the end of 2022.
    • Remaining Performance Obligation total, or Backlog, increased by $269.2 million sequentially, resulting in total committed Backlog of approximately $1.8 billion at quarter-end, representing 17 percent sequential growth and 23 percent year-over-year growth.

    “We delivered strong financial results to close out the year, with adjusted EBITDA at the high end of our guidance,” said David Mehok, Q2 CFO. “We've made significant strides in key financial metrics throughout 2023, effectively managing costs and strategically deploying capital. This led to more than doubling our full-year Adjusted EBITDA and a substantial increase in annual free cash flow when compared to the prior year. We believe that a strong demand environment and our progress on profitability improvements positions us well to execute on our new three-year financial targets.”

    Financial Outlook

    As of February 21, 2024, Q2 Holdings is providing guidance for its first quarter of 2024 and full-year 2024, which represents Q2 Holdings’ current estimates on Q2 Holdings’ operations and financial results. The financial information below represents forward-looking, non-GAAP financial information, including estimates of non-GAAP revenue and adjusted EBITDA. GAAP net loss is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes items such as depreciation and amortization, stock-based compensation, transaction-related costs, interest and other (income) expense, income taxes, lease and other restructuring charges, (gain) loss on extinguishment of debt and the impact to deferred revenue from purchase accounting. Q2 Holdings is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Q2 Holdings has not provided guidance for GAAP net loss or a reconciliation of the forward-looking adjusted EBITDA guidance to GAAP net loss. However, it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods.

    Q2 Holdings is providing guidance for its first quarter of 2024 as follows:

    • Total non-GAAP revenue of $161.7 million to $164.7 million, which would represent year-over-year growth of 6 to 8 percent.
    • Adjusted EBITDA of $22.0 million to $24.0 million, representing 13 to 15 percent of non-GAAP revenue for the quarter.

    Q2 Holdings is providing guidance for the full-year 2024 as follows:

    • Total non-GAAP revenue of $683.0 million to $689.0 million, which would represent year-over-year growth of 9 to 10 percent.
    • Adjusted EBITDA of $107.0 million to $111.0 million, representing approximately 16 percent of non-GAAP revenue for the year.

    New Three-Year Financial Targets

    Q2 Holdings is providing new three-year targets, for the years 2024 through 2026 as follows:

    • Average annual subscription revenue growth of approximately 14 percent.
    • Average annual adjusted EBITDA margin expansion of 300 to 400 basis points.
    • Free Cash Flow of greater than 70 percent of our total Adjusted EBITDA for the full year of 2026.

    Conference Call Details

    Date:

    Wednesday, February 21, 2024

    Time:

    5:00 p.m. EST

    Hosts:

    Matt Flake, CEO / David Mehok, CFO / Kirk Coleman, President / Jonathan Price, EVP Strategy and Emerging Businesses

    Conference Call Registration:

    https://conferencingportals.com/event/sPCVBfoJ

    Webcast Registration:

    https://events.q4inc.com/attendee/606425959

     

     

    All participants must register using the above links (either the webcast or conference call). A webcast of the conference call and financial results will be accessible from the investor relations section of the Q2 website at http://investors.Q2.com/. In addition, a live conference call dial-in will be available upon registration. Participants should dial in at least 10 minutes before the start of the conference call. An archived replay of the webcast will be available on this website for a limited time after the call. Q2 has used, and intends to continue to use, its investor relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    About Q2 Holdings, Inc.

    Q2 is a leading provider of digital transformation solutions for financial services, serving banks, credit unions, alternative finance companies, and fintechs in the U.S. and internationally. Q2 enables its financial institutions and fintech companies to provide comprehensive, data-driven digital engagement solutions for consumers, small businesses and corporate clients. Headquartered in Austin, Texas, Q2 has offices worldwide and is publicly traded on the NYSE under the stock symbol QTWO. To learn more, please visit Q2.com. Follow us on LinkedIn and X to stay up to date.

    Use of Non-GAAP Measures

    Q2 uses the following non-GAAP financial measures: non-GAAP revenue; adjusted EBITDA; adjusted EBITDA margin; non-GAAP gross margin; non-GAAP gross profit; non-GAAP sales and marketing expense; non-GAAP research and development expense; non-GAAP general and administrative expense; non-GAAP operating expense; non-GAAP operating income (loss); and free cash flow. Management believes that these non-GAAP financial measures are useful measures of operating performance because they exclude items that Q2 does not consider indicative of its core performance.

    In the case of non-GAAP revenue, Q2 adjusts revenue to exclude the impact to deferred revenue from purchase accounting adjustments. In the case of adjusted EBITDA, Q2 adjusts net loss for such items as interest and other (income) expense, taxes, depreciation and amortization, stock-based compensation, transaction-related costs, lease and other restructuring charges, (gain) loss on extinguishment of debt and the impact to deferred revenue from purchase accounting. In the case of adjusted EBITDA margin, Q2 calculates adjusted EBITDA margin by dividing adjusted EBITDA by non-GAAP revenue. In the case of non-GAAP gross margin and non-GAAP gross profit, Q2 adjusts gross profit and gross margin for stock-based compensation, amortization of acquired technology, transaction-related costs, lease and other restructuring charges and the impact to deferred revenue from purchase accounting. In the case of non-GAAP sales and marketing expense, non-GAAP research and development expense, and non-GAAP general and administrative expense, Q2 adjusts the corresponding GAAP expense to exclude stock-based compensation. Non-GAAP operating expense is calculated by taking the sum of non-GAAP sales and marketing expenses, non-GAAP research and development expense, and non-GAAP general and administrative expense. In the case of non-GAAP operating income (loss), Q2 adjusts operating income (loss), for stock-based compensation, transaction-related costs, amortization of acquired technology, amortization of acquired intangibles, lease and other restructuring charges, and the impact to deferred revenue from purchase accounting. In the case of free cash flow, Q2 adjusts net cash provided by (used in) operating activities for purchases of property and equipment and capitalized software development costs.

    There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income (loss). As a result, these non-GAAP financial measures have limitations and should be considered in addition to, not as a substitute for or superior to, the closest GAAP measures, or other financial measures prepared in accordance with GAAP. A reconciliation to the closest GAAP measures of these non-GAAP measures is contained in tabular form on the attached unaudited condensed consolidated financial statements.

    Q2’s management uses these non-GAAP measures as measures of operating performance; to prepare Q2’s annual operating budget; to allocate resources to enhance the financial performance of Q2’s business; to evaluate the effectiveness of Q2’s business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of Q2’s results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communication with our board of directors concerning Q2’s financial performance.

    Forward-looking Statements

    This press release contains forward-looking statements, including statements about: strong demand for our solutions; our competitive differentiation; improvements in profitability expansion; our trajectory for 2024 and beyond; our progress on profitability improvements; our new three-year financial targets and our ability to execute on them; and, Q2’s quarterly and annual financial guidance. The forward-looking statements contained in this press release are based upon Q2’s historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include risks related to: (a) global macroeconomic uncertainties and challenges in the financial services industry and credit markets, including as a result of recent bank failures, inflation and higher interest rates and their potential impacts on Q2's prospects' and customers' operations, the timing of prospect and customer implementations and purchasing decisions, Q2's business sales cycles and on account holder or end user, or End User, usage of Q2's solutions; (b) the risk of increased or new competition in Q2's existing markets and as Q2 enters new markets or new segments of existing markets, or as Q2 offers new solutions; (c) the risks associated with the development of Q2's solutions and changes to the market for Q2's solutions compared to Q2's expectations; (d) quarterly fluctuations in Q2's operating results relative to Q2's expectations and guidance and the accuracy of Q2's forecasts; (e) the risks and increased costs associated with managing growth and the challenges associated with improving global operations, hiring, retaining and motivating employees to support such growth, particularly in light of recent macroeconomic factors, including increased employee turnover, labor shortages, wage inflation and competition for talent; (f) the risks associated with Q2's transactional business which are typically driven by End-User behavior and can be influenced by external drivers outside of Q2's control; (g) the risks associated with effectively managing Q2's business and cost structure in an uncertain macroeconomic environment, including as a result of challenges in the financial services industry and the effects of seasonal or other unexpected trends; (h) the risks associated with geopolitical uncertainties, including the heightened risk of state-sponsored cyberattacks on financial services and other critical infrastructure; (i) the risks associated with accurately forecasting and managing the impacts of any macroeconomic downturn or challenges in the financial services industry on Q2's customers and their End Users, including in particular the impacts of any downturn on fintechs or alternative finance companies, and Q2's arrangements with them, which represent a newer market opportunity for us, a more complex revenue model for us and which may be more vulnerable to an economic downturn than Q2's financial institution customers; (j) the challenges and costs associated with selling, implementing and supporting Q2's solutions, particularly for larger customers with more complex requirements and longer implementation processes, including risks related to the timing and predictability of sales of Q2's solutions and the impact that the timing of bookings may have on Q2's revenue and financial performance in a period; (k) the risk that errors, interruptions or delays in Q2's solutions or Web hosting negatively impacts Q2's business and sales; (l) the risks associated with cyberattacks, data and privacy breaches and breaches of security measures within Q2's products, systems and infrastructure or the products, systems and infrastructure of third parties upon which Q2 relies and the resultant costs and liabilities and harm to Q2's business and reputation and Q2's ability to sell Q2's solutions; (m) the difficulties and risks associated with developing and selling complex new solutions and enhancements, including those using artificial intelligence, or AI, with the technical and regulatory specifications and functionality required by Q2's customers and relevant governmental authorities; (n) regulatory risks, including risks related to evolving regulation of AI and machine learning and the receipt, collection, storage, processing and transfer of data; (o) the risks associated with Q2's sales and marketing capabilities, including partner relationships and the length, cost and unpredictability of Q2's sales cycle; (p) the risks inherent in third-party technology and implementation partnerships that could cause harm to Q2's business; (q) the risk that Q2 will not be able to maintain historical contract terms such as pricing and duration; (r) the general risks associated with the complexity of Q2's customer arrangements and Q2's solutions; (s) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (t) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (u) the risks associated with further consolidation in the financial services industry; (v) the risks associated with selling Q2's solutions internationally and with the continued expansion of Q2's international operations; and (w) the risk that Q2's debt repayment obligations may adversely affect Q2's financial condition and that Q2 may not be able to obtain capital when desired or needed on favorable terms.

    Additional information relating to the uncertainty affecting the Q2 business is contained in Q2’s filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Q2’s website at http://investors.Q2.com/. These forward-looking statements represent Q2’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Q2 disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

     

    Q2 Holdings, Inc.

    Condensed Consolidated Balance Sheets

    (in thousands)

    (unaudited)

     

     

     

    December 31, 2023

     

    December 31, 2022

    Assets

     

     

     

     

    Current assets:

     

     

     

     

    Cash and cash equivalents

     

    $

    229,655

     

     

    $

    199,600

     

    Restricted cash

     

     

    3,977

     

     

     

    2,302

     

    Investments

     

     

    94,353

     

     

     

    233,753

     

    Accounts receivable, net

     

     

    42,899

     

     

     

    46,735

     

    Contract assets, current portion, net

     

     

    9,193

     

     

     

    8,909

     

    Prepaid expenses and other current assets

     

     

    11,625

     

     

     

    10,832

     

    Deferred solution and other costs, current portion

     

     

    27,521

     

     

     

    21,117

     

    Deferred implementation costs, current portion

     

     

    8,741

     

     

     

    7,828

     

    Total current assets

     

     

    427,964

     

     

     

    531,076

     

    Property and equipment, net

     

     

    41,178

     

     

     

    56,695

     

    Right of use assets

     

     

    35,453

     

     

     

    39,837

     

    Deferred solution and other costs, net of current portion

     

     

    26,090

     

     

     

    26,410

     

    Deferred implementation costs, net of current portion

     

     

    21,480

     

     

     

    18,713

     

    Intangible assets, net

     

     

    121,572

     

     

     

    145,681

     

    Goodwill

     

     

    512,869

     

     

     

    512,869

     

    Contract assets, net of current portion and allowance

     

     

    12,210

     

     

     

    16,186

     

    Other long-term assets

     

     

    2,609

     

     

     

    2,259

     

    Total assets

     

    $

    1,201,425

     

     

    $

    1,349,726

     

     

     

     

     

     

    Liabilities and stockholders' equity

     

     

     

     

    Current liabilities:

     

     

     

     

    Accounts payable and accrued liabilities

     

    $

    62,404

     

     

    $

    54,263

     

    Convertible notes, current portion

     

     

     

     

     

    10,903

     

    Deferred revenues, current portion

     

     

    118,723

     

     

     

    117,468

     

    Lease liabilities, current portion

     

     

    10,436

     

     

     

    9,408

     

    Total current liabilities

     

     

    191,563

     

     

     

    192,042

     

    Convertible notes, net of current portion

     

     

    490,464

     

     

     

    657,789

     

    Deferred revenues, net of current portion

     

     

    17,350

     

     

     

    21,691

     

    Lease liabilities, net of current portion

     

     

    45,588

     

     

     

    52,991

     

    Other long-term liabilities

     

     

    7,981

     

     

     

    6,189

     

    Total liabilities

     

     

    752,946

     

     

     

    930,702

     

     

     

     

     

     

    Stockholders' equity:

     

     

     

     

    Common stock

     

     

    6

     

     

     

    6

     

    Additional paid-in capital

     

     

    1,075,278

     

     

     

    982,300

     

    Accumulated other comprehensive loss

     

     

    (1,111

    )

     

     

    (2,972

    )

    Accumulated deficit

     

     

    (625,694

    )

     

     

    (560,310

    )

    Total stockholders' equity

     

     

    448,479

     

     

     

    419,024

     

    Total liabilities and stockholders' equity

     

    $

    1,201,425

     

     

    $

    1,349,726

     

     
     

    Q2 Holdings, Inc.

    Condensed Consolidated Statements of Comprehensive Loss

    (in thousands, except per share data)

    (unaudited)

     

     

     

    Three Months Ended December 31,

     

    Twelve Months Ended December 31,

     

     

     

    2023

     

     

     

    2022

     

     

     

    2023

     

     

     

    2022

     

     

     

     

     

     

     

     

     

     

    Revenues (1)

     

    $

    162,118

     

     

    $

    146,542

     

     

    $

    624,624

     

     

    $

    565,673

     

    Cost of revenues (2)

     

     

    80,725

     

     

     

    80,340

     

     

     

    321,973

     

     

     

    309,328

     

    Gross profit

     

     

    81,393

     

     

     

    66,202

     

     

     

    302,651

     

     

     

    256,345

     

     

     

     

     

     

     

     

     

     

    Operating expenses:

     

     

     

     

     

     

     

     

    Sales and marketing

     

     

    26,554

     

     

     

    28,505

     

     

     

    109,522

     

     

     

    108,214

     

    Research and development

     

     

    34,271

     

     

     

    34,041

     

     

     

    137,334

     

     

     

    130,103

     

    General and administrative

     

     

    30,283

     

     

     

    23,696

     

     

     

    110,186

     

     

     

    90,163

     

    Transaction-related costs

     

     

     

     

     

    294

     

     

     

    24

     

     

     

    1,176

     

    Amortization of acquired intangibles

     

     

    4,903

     

     

     

    4,982

     

     

     

    20,667

     

     

     

    18,248

     

    Lease and other restructuring charges

     

     

    3,399

     

     

     

    7,171

     

     

     

    10,975

     

     

     

    13,202

     

    Total operating expenses

     

     

    99,410

     

     

     

    98,689

     

     

     

    388,708

     

     

     

    361,106

     

    Loss from operations

     

     

    (18,017

    )

     

     

    (32,487

    )

     

     

    (86,057

    )

     

     

    (104,761

    )

    Total other income (expense), net (3)

     

     

    1,997

     

     

     

    811

     

     

     

    24,235

     

     

     

    (1,314

    )

    Loss before income taxes

     

     

    (16,020

    )

     

     

    (31,676

    )

     

     

    (61,822

    )

     

     

    (106,075

    )

    Provision for income taxes

     

     

    (2,059

    )

     

     

    (735

    )

     

     

    (3,562

    )

     

     

    (2,908

    )

    Net loss

     

    $

    (18,079

    )

     

    $

    (32,411

    )

     

    $

    (65,384

    )

     

    $

    (108,983

    )

    Other comprehensive income (loss):

     

     

     

     

     

     

     

     

    Unrealized gain (loss) on available-for-sale investments

     

     

    515

     

     

     

    490

     

     

     

    1,800

     

     

     

    (1,873

    )

    Foreign currency translation adjustment

     

     

    368

     

     

     

    141

     

     

     

    61

     

     

     

    (964

    )

    Comprehensive loss

     

    $

    (17,196

    )

     

    $

    (31,780

    )

     

    $

    (63,523

    )

     

    $

    (111,820

    )

     

     

     

     

     

     

     

     

     

    Net loss per common share:

     

     

     

     

     

     

     

     

    Net loss per common share, basic and diluted

     

    $

    (0.31

    )

     

    $

    (0.56

    )

     

    $

    (1.12

    )

     

    $

    (1.90

    )

    Weighted average common shares outstanding, basic and diluted

     

     

    58,742

     

     

     

    57,582

     

     

     

    58,354

     

     

     

    57,300

     

     

     

     

     

     

     

     

     

     

    (1)

    Includes deferred revenue reduction from purchase accounting of $0.1 million for each of the three months ended December 31, 2023 and 2022, and $0.3 million and $0.6 million for the twelve months ended December 31, 2023 and 2022, respectively.

    (2)

    Includes amortization of acquired technology of $5.8 million and $5.9 million for the three months ended December 31, 2023 and 2022, respectively, and $23.4 million and $22.7 million for the twelve months ended December 31, 2023 and 2022, respectively.

    (3)

    Includes a gain of $19.9 million related to the early extinguishment of a portion of our 2026 Notes and 2025 Notes for the twelve months ended December 31, 2023.

     

    Q2 Holdings, Inc.

    Condensed Consolidated Statements of Cash Flows

    (in thousands)

    (unaudited)

     

     

     

    Twelve Months Ended December 31,

     

     

     

    2023

     

     

     

    2022

     

    Cash flows from operating activities:

     

     

     

     

    Net loss

     

    $

    (65,384

    )

     

    $

    (108,983

    )

    Adjustments to reconcile net loss to net cash from operating activities:

     

     

     

     

    Amortization of deferred implementation, solution and other costs

     

     

    25,848

     

     

     

    23,270

     

    Depreciation and amortization

     

     

    71,707

     

     

     

    61,659

     

    Amortization of debt issuance costs

     

     

    2,104

     

     

     

    2,719

     

    Amortization of premiums and discounts on investments

     

     

    (3,192

    )

     

     

    (302

    )

    Stock-based compensation expense

     

     

    79,188

     

     

     

    65,157

     

    Deferred income taxes

     

     

    636

     

     

     

    1,611

     

    (Gain) loss on extinguishment of debt

     

     

    (19,312

    )

     

     

     

    Other non-cash charges

     

     

    4,386

     

     

     

    11,919

     

    Changes in operating assets and liabilities

     

     

    (25,689

    )

     

     

    (20,494

    )

    Net cash provided by operating activities

     

     

    70,292

     

     

     

    36,556

     

    Cash flows from investing activities:

     

     

     

     

    Net maturities (purchases) of investments

     

     

    143,911

     

     

     

    (130,463

    )

    Purchases of property and equipment

     

     

    (5,673

    )

     

     

    (11,142

    )

    Capitalized software development costs

     

     

    (24,970

    )

     

     

    (18,910

    )

    Business combinations, net of cash acquired

     

     

     

     

     

    (5,040

    )

    Net cash provided by (used in) investing activities

     

     

    113,268

     

     

     

    (165,555

    )

    Cash flows from financing activities:

     

     

     

     

    Payment for maturity of 2023 convertible notes

     

     

    (10,908

    )

     

     

     

    Payments for repurchases of convertible notes

     

     

    (149,640

    )

     

     

     

    Proceeds from capped calls related to convertible notes

     

     

    139

     

     

     

     

    Proceeds from exercise of stock options and ESPP

     

     

    8,397

     

     

     

    5,882

     

    Net cash provided by (used in) financing activities

     

     

    (152,012

    )

     

     

    5,882

     

    Effect of exchange rate changes on cash, cash equivalents and restricted cash

     

     

    182

     

     

     

    (802

    )

    Net increase (decrease) in cash, cash equivalents, and restricted cash

     

     

    31,730

     

     

     

    (123,919

    )

    Cash, cash equivalents, and restricted cash, beginning of period

     

     

    201,902

     

     

     

    325,821

     

    Cash, cash equivalents, and restricted cash, end of period

     

    $

    233,632

     

     

    $

    201,902

     

     

    Q2 Holdings, Inc.

    Reconciliation of GAAP to Non-GAAP Measures

    (in thousands, except per share data)

    (Unaudited)

     

     

     

    Three Months Ended December 31,

     

    Twelve Months Ended December 31,

     

     

     

    2023

     

     

     

    2022

     

     

     

    2023

     

     

     

    2022

     

    GAAP revenue

     

    $

    162,118

     

     

    $

    146,542

     

     

    $

    624,624

     

     

    $

    565,673

     

    Deferred revenue reduction from purchase accounting

     

     

    69

     

     

     

    129

     

     

     

    344

     

     

     

    644

     

    Non-GAAP revenue

     

    $

    162,187

     

     

    $

    146,671

     

     

    $

    624,968

     

     

    $

    566,317

     

     

     

     

     

     

     

     

     

     

    GAAP gross profit

     

    $

    81,393

     

     

    $

    66,202

     

     

    $

    302,651

     

     

    $

    256,345

     

    Stock-based compensation

     

     

    3,023

     

     

     

    3,290

     

     

     

    13,346

     

     

     

    12,262

     

    Amortization of acquired technology

     

     

    5,754

     

     

     

    5,880

     

     

     

    23,402

     

     

     

    22,690

     

    Transaction-related costs

     

     

     

     

     

    18

     

     

     

     

     

     

    18

     

    Lease and other restructuring charges

     

     

    556

     

     

     

    23

     

     

     

    1,117

     

     

     

    23

     

    Deferred revenue reduction from purchase accounting

     

     

    69

     

     

     

    129

     

     

     

    344

     

     

     

    644

     

    Non-GAAP gross profit

     

    $

    90,795

     

     

    $

    75,542

     

     

    $

    340,860

     

     

    $

    291,982

     

     

     

     

     

     

     

     

     

     

    Non-GAAP gross margin:

     

     

     

     

     

     

     

     

    Non-GAAP gross profit

     

    $

    90,795

     

     

    $

    75,542

     

     

    $

    340,860

     

     

    $

    291,982

     

    Non-GAAP revenue

     

     

    162,187

     

     

     

    146,671

     

     

     

    624,968

     

     

     

    566,317

     

    Non-GAAP gross margin

     

     

    56.0

    %

     

     

    51.5

    %

     

     

    54.5

    %

     

     

    51.6

    %

     

     

     

     

     

     

     

     

     

    GAAP sales and marketing expense

     

    $

    26,554

     

     

    $

    28,505

     

     

    $

    109,522

     

     

    $

    108,214

     

    Stock-based compensation

     

     

    (3,638

    )

     

     

    (3,755

    )

     

     

    (16,771

    )

     

     

    (15,379

    )

    Non-GAAP sales and marketing expense

     

    $

    22,916

     

     

    $

    24,750

     

     

    $

    92,751

     

     

    $

    92,835

     

     

     

     

     

     

     

     

     

     

    GAAP research and development expense

     

    $

    34,271

     

     

    $

    34,041

     

     

    $

    137,334

     

     

    $

    130,103

     

    Stock-based compensation

     

     

    (3,466

    )

     

     

    (3,624

    )

     

     

    (15,157

    )

     

     

    (13,987

    )

    Non-GAAP research and development expense

     

    $

    30,805

     

     

    $

    30,417

     

     

    $

    122,177

     

     

    $

    116,116

     

     

     

     

     

     

     

     

     

     

    GAAP general and administrative expense

     

    $

    30,283

     

     

    $

    23,696

     

     

    $

    110,186

     

     

    $

    90,163

     

    Stock-based compensation

     

     

    (9,242

    )

     

     

    (6,188

    )

     

     

    (33,914

    )

     

     

    (23,529

    )

    Non-GAAP general and administrative expense

     

    $

    21,041

     

     

    $

    17,508

     

     

    $

    76,272

     

     

    $

    66,634

     

     

     

     

     

     

     

     

     

     

    GAAP operating loss

     

    $

    (18,017

    )

     

    $

    (32,487

    )

     

    $

    (86,057

    )

     

    $

    (104,761

    )

    Deferred revenue reduction from purchase accounting

     

     

    69

     

     

     

    129

     

     

     

    344

     

     

     

    644

     

    Stock-based compensation

     

     

    19,369

     

     

     

    16,857

     

     

     

    79,188

     

     

     

    65,157

     

    Transaction-related costs

     

     

     

     

     

    312

     

     

     

    24

     

     

     

    1,194

     

    Amortization of acquired technology

     

     

    5,754

     

     

     

    5,880

     

     

     

    23,402

     

     

     

    22,690

     

    Amortization of acquired intangibles

     

     

    4,903

     

     

     

    4,982

     

     

     

    20,667

     

     

     

    18,248

     

    Lease and other restructuring charges

     

     

    3,955

     

     

     

    7,194

     

     

     

    12,092

     

     

     

    13,225

     

    Non-GAAP operating income

     

    $

    16,033

     

     

    $

    2,867

     

     

    $

    49,660

     

     

    $

    16,397

     

     

     

     

     

     

     

     

     

     

    Reconciliation of GAAP net loss to adjusted EBITDA:

     

     

     

     

     

     

     

     

    GAAP net loss

     

    $

    (18,079

    )

     

    $

    (32,411

    )

     

    $

    (65,384

    )

     

    $

    (108,983

    )

    Depreciation and amortization

     

     

    17,943

     

     

     

    16,422

     

     

     

    71,707

     

     

     

    61,659

     

    Stock-based compensation

     

     

    19,369

     

     

     

    16,857

     

     

     

    79,188

     

     

     

    65,157

     

    Provision for income taxes

     

     

    2,059

     

     

     

    735

     

     

     

    3,562

     

     

     

    2,908

     

    Interest and other (income) expense, net

     

     

    (2,131

    )

     

     

    (888

    )

     

     

    (4,724

    )

     

     

    1,087

     

    Transaction-related costs

     

     

     

     

     

    312

     

     

     

    24

     

     

     

    1,194

     

    Lease and other restructuring charges

     

     

    3,955

     

     

     

    7,194

     

     

     

    12,092

     

     

     

    13,225

     

    Gain (loss) on extinguishment of debt

     

     

     

     

     

     

     

     

    (19,869

    )

     

     

     

    Deferred revenue reduction from purchase accounting

     

     

    69

     

     

     

    129

     

     

     

    344

     

     

     

    644

     

    Adjusted EBITDA

     

    $

    23,185

     

     

    $

    8,350

     

     

    $

    76,940

     

     

    $

    36,891

     

     

     

     

     

     

     

     

     

     

    Adjusted EBITDA margin

     

     

    14.3

    %

     

     

    5.7

    %

     

     

    12.3

    %

     

     

    6.5

    %

     
     

    Q2 Holdings, Inc.

    Reconciliation of Free Cash Flow

    (in thousands)

    (unaudited)

     

     

     

    Twelve Months Ended December 31,

     

     

     

    2023

     

     

     

    2022

     

     

     

     

    Net cash provided by operating activities

     

    $

    70,292

     

     

    $

    36,556

     

    Purchases of property and equipment

     

     

    (5,673

    )

     

     

    (11,142

    )

    Capitalized software development costs

     

     

    (24,970

    )

     

     

    (18,910

    )

    Free cash flow

     

    $

    39,649

     

     

    $

    6,504

     

     

    Q2 Holdings, Inc.

    Reconciliation of GAAP to Non-GAAP Revenue Outlook

    (in thousands)

     

     

     

    Q1 2024 Outlook

     

    Full Year 2024 Outlook

     

     

    Low

     

    High

     

    Low

     

    High

     

     

     

     

     

     

     

     

     

    GAAP Revenue

     

    $

    161,700

     

    $

    164,700

     

    $

    683,000

     

    $

    689,000

    Deferred revenue reduction from purchase accounting

     

     

     

     

     

     

     

     

    Non-GAAP revenue

     

    $

    161,700

     

    $

    164,700

     

    $

    683,000

     

    $

    689,000

     


    The Q2 Holdings Stock at the time of publication of the news with a fall of -1,02 % to 38,70EUR on Lang & Schwarz stock exchange (21. Februar 2024, 22:33 Uhr).


    Business Wire (engl.)
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    Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2023 Financial Results Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for financial services, today announced results for its fourth quarter and full year ending December 31, 2023. GAAP Results for the Fourth Quarter and Full-Year …

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