NYSE$QTWO

Q2 Holdings Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Q2 Holdings' first quarter performance was solid amidst COVID-19 impacts.

Q2 Holdings reported a 30% year-over-year increase in revenue, reaching $92.4 million for the first quarter. The company signed new Tier 1 digital banking and lending deals and onboarded approximately 800,000 users. However, the company anticipates a slowdown in new business bookings and potential project delays due to the COVID-19 pandemic.

  • Revenue for the first quarter was $92.4 million, a 30% increase year-over-year.
  • GAAP gross margin was 42.5%, down from 47.8% in the prior-year quarter.
  • The company signed two new Tier 1 digital banking deals and two new Tier 1 digital lending deals.
  • Approximately 15.4 million registered users were on the Q2 platform at the end of the quarter, representing an 18% year-over-year growth.

Headline financials

Total Revenue

$92.4M

Previous: $71.3M+29.6%
EPS (adj)

-$0.09

Previous: -$0.05-80.0%
GAAP Gross Margin

42.5%

Previous: 47.8%-11.1%
Adjusted EBITDA

-$100K

Previous: $300K-133.3%
Capital Expenditures

-$4.64M

Previous: -$5.55M+16.3%
Free Cash Flow

-$38.8M

Previous: -$24.9M-55.9%
Net Income

-$34.1M

Previous: -$19.3M-76.6%
Operating Income

-$27.2M

Previous: -$17.1M-58.7%
Gross Profit

$39.3M

Previous: $34.1M+15.1%
Cash & Equivalents

$83.1M

Previous: $111M-24.8%
Total Assets

$1B

Previous: $490M+104.4%

Revenue & EPS history

Q2 · Revenue · Quarterly

$92.4M

Q1 2020+29.6%vs Q1 2019
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Forward guidance

Q2 Holdings provided guidance for the second quarter of 2020 and revised guidance for the full year 2020, anticipating the impacts of the COVID-19 pandemic on its operations and financial results.

Tailwinds

  • Total Non-GAAP revenue of $94.0 million to $96.0 million for Q2 2020, representing year-over-year growth of 21 percent to 24 percent.
  • Adjusted EBITDA of $3.0 million to $4.0 million for Q2 2020.
  • Total Non-GAAP revenue of $393.0 million to $400.0 million for full year 2020, representing year-over-year growth of 24 percent to 26 percent.
  • Adjusted EBITDA of $16.0 million to $19.0 million for full year 2020.
  • Company took proactive measures to limit travel and marketing related spend in March as we began to experience the impacts of COVID-19

Headwinds

  • Anticipate a slowdown in new business bookings.
  • Decisions to delay implementations in the coming months.
  • Being cautious as a result of the uncertainties and risks posed by COVID-19.
  • Revising full-year guidance to reflect current outlook on new customer bookings.
  • Potential for project delays on new implementations in the coming months.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+3.7%

Avg return

Earnings day

+2.8%

Avg return

5 days after

+2.2%

Avg return

30 days after

65%

31 / 48 earnings

Positive

+18.5%

Q3 2024

Best reaction

-8.2%

Q3 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.8%-0.3%-9.9%
Q4 2025-7.4%-7.1%-14.7%
Q3 2025+15.3%+20.1%+20.3%
Q1 2025+13.1%+15.5%+13.6%
Q4 2024+0.9%+1.8%-17.6%
Q3 2024+18.5%+18.4%+28.6%
Q2 2024+5.5%-1.9%+11.7%
Q1 2024+15.9%+19.7%+18.3%
Q4 2023+9.1%+10.6%+21.9%
Q3 2023+9.9%+11.9%+24.9%
Q2 2023-6.2%-4.5%-1.7%
Q1 2023+12.1%+9.6%+24.9%
Q4 2022-2.3%-5.6%-31.6%
Q3 2022-8.2%+7.7%-4.2%
Q2 2022+0.1%-2.3%-15.8%
Q1 2022-4.7%-12.3%-0.3%
Q4 2021+4.6%-1.3%-3.8%
Q3 2021+14.3%+13.2%-5.6%
Q2 2021-6.1%-11.2%-7.9%
Q1 2021-3.5%-6.2%-3.2%
Q4 2020-6.5%-7.7%-27.1%
Q3 2020+7.6%+10.8%+24.5%
Q2 2020+5.3%-4.5%-4.8%
Q1 2020+5.9%+2.1%+5.5%
Q4 2019+2.1%-4.6%-36.6%
Q3 2019-0.8%+7.1%+17.6%
Q2 2019+15.2%+15.5%+17.2%
Q1 2019-6.3%-2.0%-4.9%
Q4 2018+4.0%+3.9%+6.2%
Q3 2018+3.7%+1.6%-1.0%
Q2 2018-3.2%-1.9%+2.8%
Q1 2018+10.2%+9.2%+14.1%
Q4 2017+3.8%+5.8%+8.8%
Q3 2017-3.8%-1.3%-2.7%
Q2 2017-2.5%-2.7%+4.7%
Q1 2017-1.0%-1.3%+3.5%
Q4 2016+12.1%+13.2%+13.2%
Q3 2016-3.7%+5.5%+2.0%
Q2 2016-5.1%-14.2%-5.5%
Q1 2016+6.7%
Q4 2015+13.3%
Q3 2015+10.6%
Q2 2015+1.7%
Q1 2015+13.8%
Q4 2014+7.4%
Q3 2014-7.1%
Q2 2014+9.1%
Q1 2014+2.4%
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012

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