Q2 Holdings, Inc. · NYSE:QTWO
Q2 — Q4 2024 Earnings Presentation
20 slides from Q2's earnings presentation, Feb 12, 2025
Slide 1: 4th Quarter & Full Year 2024 Results
4th Quarter & Full Year 2024 Results February 12, 2025
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation and the accompanying oral presentation contain forward-looking statements and information that are based on our management's beliefs and assumptions and on information currently available to our management. The statements and information contained in this pres
Slide 3: 4th Quarter 2024 Review
4th Quarter 2024 Review $ 447M End of Quarter balance of cash, cash equivalents & investments3 $ 682M $ 37.6M 183.0M Subscription Annualized Adjusted EBITDA1 1 $ Recurring Revenue1 $ 2.2B 21% Ending backlog as of December 31, 2024 NON-GAAP REVENUE 7 Adjusted EBITDA margin1 Enterprise & Tier 1 Digita
Slide 4: 4th Quarter & Full-Year 2024 Review
4th Quarter & Full-Year 2024 Review We delivered strong fourth quarter results to cap off a great year. We continued our outstanding sales execution, posting our best bookings 4Q24 FY 2024 quarter of the year and second best in Totals Y/Y Change Totals Y/Y Change company history. Throughout 2024, we
Slide 5: 4th Quarter 2024 Highlights
4th Quarter 2024 Highlights New Customer Wins & Expansion Opportunities Subscription ARR Backlog 5 2 $ 682 million $2.2 billion Tier 1 & Tier 1 & Enterprise Enterprise Digital Banking Platform Relationship Pricing Subscription Annualized Total Committed Backlog Platform Recurring Revenue +15% +21% D
Slide 6: Annualized Recurring Revenue
Annualized Recurring Revenue Contribution from Subscription ARR growth of 15%; Total ARR growth impacted by continued pressure in non-Subscription ARR 15% 12% Y/Y Growth Y/Y Growth $ in Millions $ in Millions $682 $824 $735 $594 4Q23 4Q24 4Q23 4Q24 Subscription ARR Total ARR Subscription Annualized
Slide 7: Remaining Performance Obligations (RPO, Backlog)
Remaining Performance Obligations (RPO, Backlog) Continued strong year-over-year growth driven by net new and expansion-based bookings $ 2.2B 21% Y/Y Growth 9% Seq. Growth RPO Balance as of December 31, 2024 $ in billions RPO Expected to be % of Total RPO $ in billions Recognized in the Amount $2.2
Slide 8: Revenue Breakout
Revenue Breakout Diverse base of customers across asset size and customer type Enterprise 12% Remaining Tier 1 Credit Union Customers 32% 24% 61% Non-FI's 11% Next 50 Asset Bank 65% Customer Customers Customer Tier 3 Size Type 25% Concentration 10% Other Next 10 11% Tier 2 Customers 33% 12% Largest
Slide 9: Financial Outlook
Financial Outlook Represents 11% to 12% full year revenue growth and full year adjusted EBITDA margin of 21% to 22% 1Q 2025 Full Year 2025 Low High Low High Revenue $184.0 $188.0 $772.0 $779.0 Adj EBITDA $36.0 $39.0 $165.0 $170.0 $ In Millions $ In Millions As of February 12, 2025, Q2 Holdings is pr
Slide 10: Financial Targets: 2024 - 2026
Financial Targets: 2024 - 2026 Average Annual Subscription Average Annual Adjusted Free Cash Flow Conversion in Revenue Growth EBITDA Margin Expansion Full Year 2026 ~15% ~360bps >85% Strong demand driving an increasing mix of Driven by revenue mix and scaling both cost Flexibility to service debt a
Slide 11: Appendix
Appendix
Slide 12: Strong Visibility, Increasing Profitability, Expanding Opportunity
Strong Visibility, Increasing Profitability, Expanding Opportunity Long Runway to sustain High Growth and Margin Expansion +1,300 15% +5 Years 80% Subscription revenue Total Customers1 YoY Growth in Subscription ARR2 Avg. Contract Length3 as a % of Total4 460 +15% +25M 57% Avg. Customer Contracted R
Slide 13: Condensed Consolidated Balance Sheets
Q2 Holdings, Inc. Consolidated Condensed Consolidated Balance Sheets (in thousands) (unaudited) December 31, December 31, Balance Sheets 2024 2023 Assets Current assets: Cash and cash equivalents $ 358,560 $ 229,655 Restricted cash 2,233 3,977 Investments 88,066 94,353 Accounts receivable, net 42,08
Slide 14: Condensed Consolidated Statements of Comprehensive Loss
Consolidated Q2 Holdings, Inc. Condensed Consolidated Statements of Comprehensive Loss (in thousands, except per share data) (unaudited) Statements of Three Months Ended December 31, 2024 2023 Twelve Months Ended December 31, 2024 2023 Comprehensive Revenues (1) Cost of revenues (2) $ 183,045 86,702
Slide 15: Condensed Consolidated Statements of Cash Flows
Consolidated Q2 Holdings, Inc. Condensed Consolidated Statements of Cash Flows Statements of (in thousands) (unaudited) Twelve Months Ended December 31, Cash Flows 2024 2023 Cash flows from operating activities: Net loss $ (38,536) $ (65,384) Adjustments to reconcile net loss to net cash from operat
Slide 16: Reconciliation of GAAP to Non-GAAP Measures
Q2 Holdings, Inc. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of (in thousands) (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 GAAP to Non-GAAP GAAP revenue Deferred revenue reduction from purchase accounting Non-GAAP revenue $ $ 183,0
Slide 17: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow Q2 Holdings, Inc. Reconciliation of Free Cash Flow (in thousands) (unaudited) Twelve Months Ended December 31, 2024 2023 Net cash provided by operating activities $ 135,751 $ 70,292 Purchases of property and equipment (6,692) (5,673) Capitalized software development
Slide 18: Definitions
Definitions Adjusted EBITDA: We define adjusted EBITDA as net income (loss) before depreciation, amortization, stock-based compensation, transaction-related costs, provision for income taxes, interest and other (income) expense, net, deferred revenue reduction from purchase accounting, gain on extin
Slide 19: Definitions
Definitions Digital Banking Platform: Our digital banking platform allows financial institutions to offer a comprehensive and unified suite of digital banking services to their End Users. Our open platform architecture, deep integration with other systems and the multi-tenant aspects of our infrastr
Slide 20: Definitions
Definitions Subscription Annualized Recurring Revenue: We calculate Subscription ARR as the annualized value of all recurring subscription revenue recognized in the last month of the reporting period, with the exception of variable revenue in excess of contracted amounts for which we instead take th