Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2020 Financial Results
Q2 Holdings (NYSE:QTWO) reported Q4 2020 revenue of $109 million, a 26% year-over-year increase. Full-year revenue rose to $402.8 million, up 28% from 2019. Despite revenue growth, Q4 GAAP net loss widened to $37.8 million, compared to $15.7 million a year prior. GAAP gross margin fell to 40.8%, down from 48.4% in Q4 2019. The company signed multiple significant contracts and increased registered users by 22% to approximately 17.8 million.
- Revenue for Q4 2020 was $109 million, up 26% year-over-year.
- Full-year 2020 revenue totaled $402.8 million, a 28% increase from 2019.
- Added over 3.1 million registered users in 2020, reaching 17.8 million total users.
- Signed contracts with major financial institutions indicating strong market position.
- Free cash flow for Q4 was $11.6 million, ending the year with $539.1 million in cash and investments.
- Q4 GAAP net loss was $37.8 million, widening from $15.7 million in Q4 2019.
- GAAP gross margin dropped to 40.8%, down from 48.4% in the prior-year quarter.
- Non-GAAP gross margin for full-year 2020 decreased to 51.9%, from 54.0% in 2019.
Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for banking and lending, today announced results for its fourth quarter and full year ending December 31, 2020.
GAAP Results for the Fourth Quarter and Full-Year 2020
-
Revenue for the fourth quarter of
$109.0 million , up 26 percent year-over-year and up 5 percent from the third quarter of 2020. Full-year 2020 revenue totaled$402.8 million , up 28 percent year-over-year.
- GAAP gross margin for the fourth quarter of 40.8 percent, down from 48.4 percent for the prior-year quarter and 44.7 percent for the third quarter of 2020. GAAP gross margin for full-year 2020 of 43.4 percent, down from 48.5 percent for the full-year 2019.
-
GAAP net loss for the fourth quarter of
$37.8 million , compared to GAAP net losses of$15.7 million for the prior-year quarter and$26.7 million for the third quarter of 2020. GAAP net loss for full-year 2020 of$137.6 million , which compares to$70.9 million for full-year 2019.
Non-GAAP Results for the Fourth Quarter and Full-Year 2020
-
Non-GAAP revenue for the fourth quarter of
$109.7 million , up 24 percent year-over-year and up 5 percent from the third quarter of 2020. Full-year 2020 non-GAAP revenue totaled$407.2 million , up 28 percent year-over-year.
- Non-GAAP gross margin for the fourth quarter of 48.3 percent, down from 56.8 percent for the prior-year quarter and 52.5 percent for the third quarter of 2020. Non-GAAP gross margin for full-year 2020 of 51.9 percent, down from 54.0 percent for full-year 2019.
-
Adjusted EBITDA for the fourth quarter of
$6.1 million , down from$10.6 million for the prior-year quarter and$8.1 million for the third quarter of 2020. Full-year 2020 adjusted EBITDA of$22.2 million compared to$19.6 million for the full-year 2019.
During the fourth quarter, the company recorded a contract asset impairment associated with a fintech customer and an accounting adjustment pertaining to its Cloud Lending business. These combined adjustments resulted in a positive impact to revenue and a negative impact to cost of revenue and gross margin, resulting in a 370 basis point reduction to both our GAAP and non-GAAP gross margin for the fourth quarter and a 90 basis point reduction to both our GAAP and non-GAAP gross margin for the full-year 2020. Please see the table below for more information regarding these impacts.
For a reconciliation of our GAAP to non-GAAP results, please see the tables below.
“While 2020 was unprecedented in many ways, I’m proud of the way our teams performed in the fourth quarter and throughout the year,” said Q2 CEO Matt Flake. “Our delivery teams had a particularly good quarter, closing out a record year in which we added over 3.1 million registered users. We also had several notable sales wins and another strong quarter of renewals and cross-sale activity. In 2020, we demonstrated the resiliency and flexibility of our business, and we believe the strength of our pipeline and product portfolio position us for continued success in 2021.”
Fourth Quarter Highlights
- Signed a loan pricing contract with an enterprise bank in the United States, a subsidiary of a top 10 global bank.
-
Signed a commercial banking contract with an existing Tier 1 customer, an
$8 billion financial institution.
-
Signed a loan pricing contract with an existing Tier 1 customer, a
$6 billion financial institution.
- Exited the fourth quarter with approximately 17.8 million registered users on the Q2 Platform, representing 22 percent year-over-year growth and 4 percent sequential growth from the previous quarter.
“Our business performance for the quarter was solid as we exceeded the high end of our revenue guidance," said Q2 CFO David Mehok. “Free cash flow in the fourth quarter was
Financial outlook
As of February 17, 2021, Q2 Holdings is providing guidance for its first quarter of 2021 and full-year 2021, which represents Q2 Holdings’ current estimates of the anticipated impacts of the COVID-19 pandemic 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, acquisition-related costs, interest, income taxes, unoccupied lease charges, partnership termination charges, 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 foregoing 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 2021 as follows:
-
Total non-GAAP revenue of
$114.6 million to$116.1 million , which would represent year-over-year growth of 22 percent to 24 percent.
-
Adjusted EBITDA of
$8.5 million to$9.1 million .
Q2 Holdings is providing guidance for the full-year 2021 as follows:
-
Total non-GAAP revenue of
$488.0 million to$491.0 million , which would represent year-over-year growth of 20 to 21 percent.
-
Adjusted EBITDA of
$34.5 million to$36.5 million , representing 7 percent of non-GAAP revenue for the year.
Conference Call Details
Date: |
Thursday, February 18, 2021 |
Time: |
8:30 a.m. EST |
Hosts: |
Matt Flake, CEO / David Mehok, CFO |
Conference ID: |
1397098 |
Registration: |
Please join the conference call at least 10 minutes early to ensure the line is connected. A live 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/.
An archived replay of the webcast will be available on this website on a temporary basis shortly after the call.
About Q2 Holdings, Inc.
Q2 is a financial experience company dedicated to providing digital banking and lending solutions to banks, credit unions, alternative finance, and fintech companies in the U.S. and internationally. With comprehensive end-to-end solution sets, Q2 enables its partners to provide cohesive, secure, data-driven experiences to every account holder – from consumer to small business and corporate. Headquartered in Austin, Texas, Q2 has offices throughout the world and is publicly traded on the NYSE under the stock symbol QTWO. To learn more, please visit Q2.com.
Use of Non-GAAP Measures
Q2 uses the following non-GAAP financial measures: non-GAAP revenue; adjusted EBITDA; 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); non-GAAP net income; non-GAAP net income per share; and pro forma weighted-average diluted number of common shares outstanding. 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, taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, unoccupied lease charges, partnership termination charges and the impact to deferred revenue from purchase accounting. 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, acquisition-related costs, 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), non-GAAP net income (loss), and non-GAAP net income (loss) per share, Q2 adjusts operating loss and net loss, respectively, for stock-based compensation, acquisition-related costs, amortization of acquired technology, amortization of acquired intangibles, unoccupied lease charges, partnership termination charges, and the impact to deferred revenue from purchase accounting, and with respect to non-GAAP net income, amortization of debt discount and issuance costs. In the case of pro forma diluted weighted-average number of common shares outstanding, Q2 adjusts the diluted weighted-average number of common shares outstanding by the weighted-average effect of potentially dilutive shares.
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: the resiliency and flexibility of Q2’s business; the strength of Q2’s pipeline and product portfolio to position it for continued success; Q2’s improved balance sheet and continued success in operational delivery; Q2’s position to capitalize on its long-term market opportunity; 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 the adverse impacts of the COVID-19 pandemic on Q2’s business operations and on global economic and financial markets, including on Q2’s customers, partners and suppliers and employees and business, as well as risks related to: (a) the risk of increased competition in its existing markets and as it enters new sections of the market with Tier 1 customers, new markets with Alt-FIs and fintechs and new products and services; (b) the risk that COVID-19, government actions or other factors continue to negatively impact or disrupt the markets for Q2’s solutions and that the markets for Q2’s solutions do not return to normal or grow as anticipated, in particular with respect to Tier 1 customers and Alt-FI and fintech customers; (c) the risk that Q2’s increased focus on selling to larger Tier 1 customers may result in greater uncertainty and variability in Q2’s business and sales results; (d) the risk that changes in Q2’s market, business or sales organization negatively impact its ability to sell its products and services; (e) 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; (f) the risk that errors, interruptions or delays in Q2’s products or services or Web hosting negatively impacts Q2’s business and sales; (g) risks associated with cyberattacks, data 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 its ability to sell its products and services; (h) the impact that a slowdown in the economy, financial markets and credit markets may have on Q2’s customers and Q2’s business sales cycles, prospects and customers’ spending decisions and timing of implementation decisions, particularly in regions where a significant number of Q2’s customers are concentrated; (i) the difficulties and risks associated with developing and selling complex new solutions and enhancements with the technical and regulatory specifications and functionality required by customers and governmental authorities; (j) the risks inherent in technology and implementation partnerships that could cause harm to Q2’s business; (k) the difficulties and costs Q2 may encounter with complex implementations of its solutions and the resulting impact on reputation and the timing of its revenue from any delayed implementations; (l) the risk that Q2 will not be able to maintain historical contract terms such as pricing and duration; (m) the risks associated with managing growth and the challenges associated with improving operations and hiring, retaining and motivating employees to support such growth; (n) the risk that modifications or negotiations of contractual arrangements will be necessary during Q2’s implementations of its solutions or the general risks associated with the complexity of Q2’s customer arrangements; (o) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (p) the risks associated with anticipated higher operating expenses in 2021 and beyond; (q) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (r) the risks associated with further consolidation in the financial services industry; (s) risks associated with selling Q2 solutions internationally; and (t) the risk that Q2 debt repayment obligations may adversely affect its financial condition and cash flows from operations in the future 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) | ||||||||
December 31, |
|
December, 31 |
||||||
|
2020 |
|
|
|
2019 |
|
||
(unaudited) |
|
(unaudited) |
||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
407,703 |
|
$ |
100,094 |
|
||
| Restricted cash |
|
3,482 |
|
|
3,468 |
|
||
| Investments |
|
131,352 |
|
|
32,325 |
|
||
| Accounts receivable, net |
|
36,430 |
|
|
22,442 |
|
||
| Contract assets, current portion, net |
|
1,088 |
|
|
872 |
|
||
| Prepaid expenses and other current assets |
|
8,861 |
|
|
6,354 |
|
||
| Deferred solution and other costs, current portion |
|
19,042 |
|
|
15,609 |
|
||
| Deferred implementation costs, current portion |
|
8,258 |
|
|
5,171 |
|
||
| Total current assets |
|
616,216 |
|
|
186,335 |
|
||
| Property and equipment, net |
|
49,558 |
|
|
39,252 |
|
||
| Right of use assets |
|
34,709 |
|
|
35,388 |
|
||
| Deferred solution and other costs, net of current portion |
|
32,782 |
|
|
29,220 |
|
||
| Deferred implementation costs, net of current portion |
|
15,184 |
|
|
15,848 |
|
||
| Intangible assets, net |
|
184,859 |
|
|
223,861 |
|
||
| Goodwill |
|
462,274 |
|
|
462,023 |
|
||
| Contract assets, net of current portion and allowance |
|
18,694 |
|
|
15,189 |
|
||
| Other long-term assets |
|
2,426 |
|
|
2,318 |
|
||
| Total assets | $ |
1,416,702 |
|
$ |
1,009,434 |
|
||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ |
57,047 |
|
$ |
65,976 |
|
||
| Deferred revenues, current portion |
|
81,935 |
|
|
57,850 |
|
||
| Lease liabilities, current portion |
|
6,844 |
|
|
9,140 |
|
||
| Total current liabilities |
|
145,826 |
|
|
132,966 |
|
||
| Convertible notes, net of current portion |
|
557,468 |
|
|
424,784 |
|
||
| Deferred revenues, net of current portion |
|
29,203 |
|
|
32,954 |
|
||
| Lease liabilities, net of current portion |
|
36,739 |
|
|
36,079 |
|
||
| Other long-term liabilities |
|
4,102 |
|
|
3,239 |
|
||
| Total liabilities |
|
773,338 |
|
|
630,022 |
|
||
| Stockholders' equity: | ||||||||
| Common stock |
|
6 |
|
|
5 |
|
||
| Additional paid-in capital |
|
1,024,577 |
|
|
622,692 |
|
||
| Accumulated other comprehensive income (loss) |
|
(32 |
) |
|
14 |
|
||
| Accumulated deficit |
|
(381,187 |
) |
|
(243,299 |
) |
||
| Total stockholders' equity |
|
643,364 |
|
|
379,412 |
|
||
| Total liabilities and stockholders' equity | $ |
1,416,702 |
|
$ |
1,009,434 |
|
||
| Q2 Holdings, Inc. | ||||||||||||||||
| Condensed Consolidated Statements of Comprehensive Loss | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
||
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
||||||||||
| Revenues (1) | $ |
108,986 |
|
$ |
86,840 |
|
$ |
402,751 |
|
$ |
315,484 |
|
||||
| Cost of revenues (2) (3) |
|
64,476 |
|
|
44,802 |
|
|
228,152 |
|
|
162,485 |
|
||||
| Gross profit |
|
44,510 |
|
|
42,038 |
|
|
174,599 |
|
|
152,999 |
|
||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing (2) |
|
17,726 |
|
|
16,576 |
|
|
72,323 |
|
|
63,947 |
|
||||
| Research and development (2) |
|
25,213 |
|
|
19,881 |
|
|
97,381 |
|
|
76,273 |
|
||||
| General and administrative (2) |
|
17,061 |
|
|
15,382 |
|
|
70,937 |
|
|
56,739 |
|
||||
| Acquisition related costs |
|
500 |
|
|
8,574 |
|
|
478 |
|
|
16,027 |
|
||||
| Amortization of acquired intangibles |
|
4,441 |
|
|
3,307 |
|
|
17,888 |
|
|
6,339 |
|
||||
| Partnership termination charges |
|
- |
|
|
- |
|
|
13,244 |
|
|
- |
|
||||
| Unoccupied lease charges (4) |
|
45 |
|
|
176 |
|
|
2,181 |
|
|
420 |
|
||||
| Total operating expenses |
|
64,986 |
|
|
63,896 |
|
|
274,432 |
|
|
219,745 |
|
||||
| Loss from operations |
|
(20,476 |
) |
|
(21,858 |
) |
|
(99,833 |
) |
|
(66,746 |
) |
||||
| Other income (expense), net (5) |
|
(16,550 |
) |
|
(5,988 |
) |
|
(36,371 |
) |
|
(16,618 |
) |
||||
| Loss before income taxes |
|
(37,026 |
) |
|
(27,846 |
) |
|
(136,204 |
) |
|
(83,364 |
) |
||||
| Benefit from (provision for) income taxes |
|
(795 |
) |
|
12,180 |
|
|
(1,416 |
) |
|
12,487 |
|
||||
| Net loss | $ |
(37,821 |
) |
$ |
(15,666 |
) |
$ |
(137,620 |
) |
$ |
(70,877 |
) |
||||
| Other comprehensive loss: | ||||||||||||||||
| Unrealized gain (loss) on available-for-sale investments |
|
(52 |
) |
|
(24 |
) |
|
(118 |
) |
|
223 |
|
||||
| Foreign currency translation adjustment |
|
58 |
|
|
(103 |
) |
|
72 |
|
|
(172 |
) |
||||
| Comprehensive loss | $ |
(37,815 |
) |
$ |
(15,793 |
) |
$ |
(137,666 |
) |
$ |
(70,826 |
) |
||||
| Net loss per common share: | ||||||||||||||||
| Net loss per common share, basic and diluted | $ |
(0.69 |
) |
$ |
(0.32 |
) |
$ |
(2.65 |
) |
$ |
(1.53 |
) |
||||
| Weighted average common shares outstanding, basic and diluted |
|
54,632 |
|
|
48,363 |
|
|
52,019 |
|
|
46,198 |
|
||||
(1) |
Includes deferred revenue reduction from purchase accounting of |
||||||||
(2) |
Includes stock-based compensation expense as follows: | ||||||||
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
||
| Cost of revenues | $ |
2,466 |
$ |
1,973 |
$ |
9,888 |
$ |
6,427 |
||||||||
| Sales and marketing |
|
2,417 |
|
|
2,278 |
|
|
8,770 |
|
|
7,740 |
|
||||
| Research and development |
|
3,089 |
|
|
2,781 |
|
|
12,869 |
|
|
9,864 |
|
||||
| General and administrative |
|
4,348 |
|
|
3,811 |
|
|
17,708 |
|
|
15,347 |
|
||||
| Total stock-based compensation expense | $ |
12,320 |
|
$ |
10,843 |
|
$ |
49,235 |
|
$ |
39,378 |
|
||||
(3) |
Includes amortization of acquired technology of |
|
|
(4) |
Unoccupied lease charges include costs related to the early exit from various facilities, partially offset by anticipated sublease income from these facilities. For the three and twelve months ended December 31, 2020, the charges related to facilities in California, North Carolina, and Texas, and for the three and twelve months ended December 31, 2019, the charges related to facilities in Georgia. |
|
|
(5) |
The three and twelve months ended December 31, 2020 includes an |
| Q2 Holdings, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
Twelve Months Ended December 31, |
||||||||
|
2020 |
|
|
|
2019 |
|
||
(unaudited) |
|
(unaudited) |
||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ |
(137,620 |
) |
$ |
(70,877 |
) |
||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
| Amortization of deferred implementation, solution and other costs |
|
22,936 |
|
|
13,634 |
|
||
| Depreciation and amortization |
|
51,840 |
|
|
28,457 |
|
||
| Amortization of debt issuance costs |
|
1,977 |
|
|
1,467 |
|
||
| Amortization of debt discount |
|
21,317 |
|
|
15,154 |
|
||
| Amortization of premiums on investments |
|
366 |
|
|
226 |
|
||
| Stock-based compensation expenses |
|
50,682 |
|
|
40,510 |
|
||
| Deferred income taxes |
|
946 |
|
|
(12,774 |
) |
||
| Loss on extinguishment of debt |
|
8,932 |
|
|
- |
|
||
| Other non-cash charges |
|
2,626 |
|
|
885 |
|
||
| Changes in operating assets and liabilities |
|
(26,892 |
) |
|
(16,115 |
) |
||
| Net cash provided by (used in) operating activities |
|
(2,890 |
) |
|
567 |
|
||
| Cash flows from investing activities: | ||||||||
| Net maturities (purchases) of investments |
|
(99,496 |
) |
|
36,650 |
|
||
| Purchases of property and equipment |
|
(23,715 |
) |
|
(13,860 |
) |
||
| Business combinations, net of cash acquired |
|
- |
|
|
(505,577 |
) |
||
| Purchases of intangible assets |
|
- |
|
|
(288 |
) |
||
| Capitalization of software development costs |
|
(952 |
) |
|
(177 |
) |
||
| Net cash used in investing activities |
|
(124,163 |
) |
|
(483,252 |
) |
||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock, net of issuance costs |
|
311,321 |
|
|
195,289 |
|
||
| Proceeds from issuance of convertible notes, net of issuance costs |
|
132,589 |
|
|
307,016 |
|
||
| Purchase of capped call transactions |
|
(39,830 |
) |
|
(40,765 |
) |
||
| Proceeds from bond hedge related to convertible notes |
|
171,679 |
|
|
- |
|
||
| Payments for warrants related to convertible notes |
|
(137,538 |
) |
|
- |
|
||
| Proceeds from exercise of stock options to purchase common stock |
|
13,317 |
|
|
14,551 |
|
||
| Payment of contingent consideration |
|
(16,862 |
) |
|
- |
|
||
| Net cash provided by financing activities |
|
434,676 |
|
|
476,091 |
|
||
| Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
307,623 |
|
|
(6,594 |
) |
||
| Cash, cash equivalents, and restricted cash, beginning of period |
|
103,562 |
|
|
110,156 |
|
||
| Cash, cash equivalents, and restricted cash, end of period | $ |
411,185 |
|
$ |
103,562 |
|
||
| Q2 Holdings, Inc. | ||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Measures | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||||
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
||
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
||||||||||
| GAAP revenue | $ |
108,986 |
|
$ |
86,840 |
|
$ |
402,751 |
|
$ |
315,484 |
|
||||
Deferred revenue reduction from purchase accounting |
|
684 |
|
|
1,829 |
|
|
4,404 |
|
|
1,829 |
|
||||
| Non-GAAP revenue | $ |
109,670 |
|
$ |
88,669 |
|
$ |
407,155 |
|
$ |
317,313 |
|
||||
| GAAP gross profit | $ |
44,510 |
|
$ |
42,038 |
|
$ |
174,599 |
|
$ |
152,999 |
|
||||
| Stock-based compensation |
|
2,466 |
|
|
1,973 |
|
|
9,888 |
|
|
6,427 |
|
||||
| Amortization of acquired technology |
|
5,157 |
|
|
4,357 |
|
|
21,341 |
|
|
9,871 |
|
||||
| Acquisition related costs |
|
194 |
|
|
193 |
|
|
929 |
|
|
291 |
|
||||
| Deferred revenue reduction from purchase accounting |
|
684 |
|
|
1,829 |
|
|
4,404 |
|
|
1,829 |
|
||||
| Non-GAAP gross profit | $ |
53,011 |
|
$ |
50,390 |
|
$ |
211,161 |
|
$ |
171,417 |
|
||||
| Non-GAAP gross margin: | ||||||||||||||||
| Non-GAAP gross profit | $ |
53,011 |
|
$ |
50,390 |
|
$ |
211,161 |
|
$ |
171,417 |
|
||||
| Non-GAAP revenue |
|
109,670 |
|
|
88,669 |
|
|
407,155 |
|
|
317,313 |
|
||||
| Non-GAAP gross margin |
|
48.3 |
% |
|
56.8 |
% |
|
51.9 |
% |
|
54.0 |
% |
||||
| GAAP sales and marketing expense | $ |
17,726 |
|
$ |
16,576 |
|
$ |
72,323 |
|
$ |
63,947 |
|
||||
| Stock-based compensation |
|
(2,417 |
) |
|
(2,278 |
) |
|
(8,770 |
) |
|
(7,740 |
) |
||||
| Non-GAAP sales and marketing expense | $ |
15,309 |
|
$ |
14,298 |
|
$ |
63,553 |
|
$ |
56,207 |
|
||||
| GAAP research and development expense | $ |
25,213 |
|
$ |
19,881 |
|
$ |
97,381 |
|
$ |
76,273 |
|
||||
| Stock-based compensation |
|
(3,089 |
) |
|
(2,781 |
) |
|
(12,869 |
) |
|
(9,864 |
) |
||||
| Non-GAAP research and development expense | $ |
22,124 |
|
$ |
17,100 |
|
$ |
84,512 |
|
$ |
66,409 |
|
||||
| GAAP general and administrative expense | $ |
17,061 |
|
$ |
15,382 |
|
$ |
70,937 |
|
$ |
56,739 |
|
||||
| Stock-based compensation |
|
(4,348 |
) |
|
(3,811 |
) |
|
(17,708 |
) |
|
(15,347 |
) |
||||
| Non-GAAP general and administrative expense | $ |
12,713 |
|
$ |
11,571 |
|
$ |
53,229 |
|
$ |
41,392 |
|
||||
| GAAP operating loss | $ |
(20,476 |
) |
$ |
(21,858 |
) |
$ |
(99,833 |
) |
$ |
(66,746 |
) |
||||
| Deferred revenue reduction from purchase accounting |
|
684 |
|
|
1,829 |
|
|
4,404 |
|
|
1,829 |
|
||||
| Partnership termination charges |
|
- |
|
|
- |
|
|
13,244 |
|
|
- |
|
||||
| Stock-based compensation |
|
12,320 |
|
|
10,843 |
|
|
49,235 |
|
|
39,378 |
|
||||
| Acquisition related costs |
|
694 |
|
|
8,766 |
|
|
1,408 |
|
|
16,316 |
|
||||
| Amortization of acquired technology |
|
5,157 |
|
|
4,357 |
|
|
21,341 |
|
|
9,871 |
|
||||
| Amortization of acquired intangibles |
|
4,441 |
|
|
3,307 |
|
|
17,888 |
|
|
6,339 |
|
||||
| Unoccupied lease charges |
|
45 |
|
|
176 |
|
|
2,181 |
|
|
420 |
|
||||
| Non-GAAP operating income | $ |
2,865 |
|
$ |
7,420 |
|
$ |
9,868 |
|
$ |
7,407 |
|
||||
| GAAP net loss | $ |
(37,821 |
) |
$ |
(15,666 |
) |
$ |
(137,620 |
) |
$ |
(70,877 |
) |
||||
| Deferred revenue reduction from purchase accounting |
|
684 |
|
|
1,829 |
|
|
4,404 |
|
|
1,829 |
|
||||
| Partnership termination charges |
|
- |
|
|
- |
|
|
13,244 |
|
|
- |
|
||||
| Loss on extinguishment of debt |
|
8,932 |
|
|
- |
|
|
8,932 |
|
|
- |
|
||||
| Stock-based compensation |
|
12,320 |
|
|
10,843 |
|
|
49,235 |
|
|
39,378 |
|
||||
| Acquisition related costs |
|
694 |
|
|
8,766 |
|
|
1,408 |
|
|
16,316 |
|
||||
| Amortization of acquired technology |
|
5,157 |
|
|
4,357 |
|
|
21,341 |
|
|
9,871 |
|
||||
| Amortization of acquired intangibles |
|
4,441 |
|
|
3,307 |
|
|
17,888 |
|
|
6,339 |
|
||||
| Unoccupied lease charges |
|
45 |
|
|
176 |
|
|
2,181 |
|
|
420 |
|
||||
| Amortization of debt discount and issuance costs |
|
6,486 |
|
|
5,519 |
|
|
23,294 |
|
|
16,672 |
|
||||
| Non-GAAP net income | $ |
938 |
|
$ |
19,131 |
|
$ |
4,307 |
|
$ |
19,948 |
|
||||
| Reconciliation from diluted weighted-average number of common shares | ||||||||||||||||
| as reported to pro forma diluted weighted average number of common shares | ||||||||||||||||
| Diluted weighted-average number of common shares, as reported |
|
54,632 |
|
|
48,363 |
|
|
52,019 |
|
|
46,198 |
|
||||
| Non-GAAP weighted-average effect of potentially dilutive shares |
|
3,197 |
|
|
2,148 |
|
|
2,403 |
|
|
2,448 |
|
||||
| Pro forma diluted weighted-average number of common shares |
|
57,829 |
|
|
50,511 |
|
|
54,422 |
|
|
48,646 |
|
||||
| Calculation of non-GAAP income per share: | ||||||||||||||||
| Non-GAAP net income | $ |
938 |
|
$ |
19,131 |
|
$ |
4,307 |
|
$ |
19,948 |
|
||||
| Pro forma diluted weighted-average number of common shares |
|
57,829 |
|
|
50,511 |
|
|
54,422 |
|
|
48,646 |
|
||||
| Non-GAAP net income per share | $ |
0.02 |
|
$ |
0.38 |
|
$ |
0.08 |
|
$ |
0.41 |
|
||||
| Reconciliation of GAAP net loss to adjusted EBITDA: | ||||||||||||||||
| GAAP net loss | $ |
(37,821 |
) |
$ |
(15,666 |
) |
$ |
(137,620 |
) |
$ |
(70,877 |
) |
||||
| Depreciation and amortization |
|
12,865 |
|
|
10,729 |
|
|
51,840 |
|
|
28,457 |
|
||||
| Stock-based compensation |
|
12,320 |
|
|
10,843 |
|
|
49,235 |
|
|
39,378 |
|
||||
| (Benefit from) provision for income taxes |
|
795 |
|
|
(12,180 |
) |
|
1,416 |
|
|
(12,487 |
) |
||||
| Interest (income) expense, net |
|
7,594 |
|
|
6,064 |
|
|
27,180 |
|
|
16,572 |
|
||||
| Acquisition related costs |
|
694 |
|
|
8,766 |
|
|
1,408 |
|
|
16,316 |
|
||||
| Unoccupied lease charges |
|
45 |
|
|
176 |
|
|
2,181 |
|
|
420 |
|
||||
| Loss on extinguishment of debt |
|
8,932 |
|
|
- |
|
|
8,932 |
|
|
- |
|
||||
| Deferred revenue reduction from purchase accounting |
|
684 |
|
|
1,829 |
|
|
4,404 |
|
|
1,829 |
|
||||
| Partnership termination charges |
|
- |
|
|
- |
|
|
13,244 |
|
|
- |
|
||||
| Adjusted EBITDA | $ |
6,108 |
|
$ |
10,561 |
|
$ |
22,220 |
|
$ |
19,608 |
|
||||
| Q2 Holdings, Inc. | ||||||||||||
| Reconciliation of GAAP to Non-GAAP Revenue Guidance | ||||||||||||
| (in thousands) | ||||||||||||
Q1 2021 Guidance |
|
Full Year 2021 Guidance |
||||||||||
Low |
|
High |
|
Low |
|
High |
||||||
| GAAP revenue | $ |
114,067 |
$ |
115,567 |
$ |
486,301 |
$ |
489,301 |
||||
Deferred revenue reduction from purchase accounting |
|
533 |
|
533 |
|
1,699 |
|
1,699 |
||||
| Non-GAAP revenue | $ |
114,600 |
$ |
116,100 |
$ |
488,000 |
$ |
491,000 |
||||
| Q2 Holdings, Inc. | ||||
| Impacts of Impairment Charge and Accounting Adjustment | ||||
| (in thousands) | ||||
| Three Months Ended December 31, 2020 |
||||
| (unaudited) | ||||
| Impact to revenue: | ||||
| Cloud Lending revenue accounting adjustment | $ |
3,305 |
|
|
| Contract asset impairment charge | $ |
(2,838 |
) |
|
| Total Impact to revenue | $ |
467 |
|
|
| Impact to cost of revenue | ||||
| Cloud Lending revenue accounting adjustment | $ |
4,218 |
|
|
| Total Impact to cost of revenue | $ |
4,218 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005701/en/
FAQ
What were Q2 Holdings' Q4 2020 revenue results?
How did Q2 Holdings perform in 2020 compared to 2019?
What was the GAAP net loss for Q2 Holdings in Q4 2020?
How many registered users does Q2 Holdings have?
What is the financial outlook for Q2 Holdings in 2021?
