NYSE$QTWO

Q2 Holdings Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Q2 Holdings announced its financial results for the third quarter of 2022.

Q2 Holdings reported Q3 2022 revenue of $144.8 million, a 14% year-over-year increase. The company's adjusted EBITDA was $10.8 million, up from $7.3 million in the prior-year quarter. While total revenue came in below guidance due to lower-than-expected discretionary services and transactional revenue, the company anticipates continued pressure on lower margin revenue streams.

  • Q2 Holdings' Q3 revenue reached $144.8 million, reflecting a 14% year-over-year increase.
  • The company's GAAP gross margin for Q3 was 46.2%, an increase from 45.0% in the prior-year quarter.
  • Q2 Holdings reported a GAAP net loss of $27.8 million for Q3, compared to a net loss of $31.6 million in the prior-year quarter.
  • Adjusted EBITDA for Q3 was $10.8 million, up from $7.3 million in the prior-year quarter.

Headline financials

Total Revenue

$145M

Previous: $127M+14.2%
EPS (adj)

$0.10

Previous: $0.03+233.3%
GAAP Gross Margin

46.2%

Previous: 45.0%+2.7%
Adjusted EBITDA

$10.8M

Previous: $7.3M+47.9%
Capital Expenditures

-$8.93M

Previous: -$16.1M+44.4%
Free Cash Flow

-$36.7M

Previous: -$47.6M+22.9%
Net Income

-$27.8M

Previous: -$31.6M+12.0%
Operating Income

-$27.1M

Previous: -$23M-17.9%
Gross Profit

$66.9M

Previous: $57M+17.3%
Cash & Equivalents

$193M

Previous: $295M-34.7%
Total Assets

$1.33B

Previous: $1.38B-3.4%
Stock-Based Comp

$17.8M

Previous: $14.4M+23.5%

Revenue & EPS history

Q2 · Revenue · Quarterly

$145M

Q3 2022+14.2%vs Q3 2021
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Forward guidance

Q2 Holdings is providing guidance for its fourth quarter of 2022 and updated guidance for its full-year 2022. Total non-GAAP revenue of $148.4 million to $150.4 million, which would represent year-over-year growth of 12 percent to 14 percent. Adjusted EBITDA of $10.5 million to $12.5 million, representing 7 to 8 percent of non-GAAP revenue for the year.

Tailwinds

  • Total non-GAAP revenue of $148.4 million to $150.4 million for Q4 2022.
  • Year-over-year revenue growth of 12% to 14% for Q4 2022.
  • Adjusted EBITDA of $10.5 million to $12.5 million for Q4 2022.
  • Adjusted EBITDA represents 7% to 8% of non-GAAP revenue for Q4 2022.
  • Total non-GAAP revenue of $568.0 million to $570.0 million for full year 2022.

Headwinds

  • Uncertainty regarding the ultimate outcome of GAAP exclusions.
  • Potential material impact of excluded items on GAAP results in future periods.
  • Continued pressure on lower margin revenue streams.
  • Expectation of continued pressure on lower margin revenue streams.
  • Revised full-year outlook reflects focus on driving profitable growth.

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 Q3 2022

Historical avgQ3 2022

+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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