Q2 Holdings, Inc. · NYSE:QTWO
Q2 — Q1 2025 Earnings Presentation
20 slides from Q2's earnings presentation, May 7, 2025
Slide 1: 1st Quarter 2025 Results
1st Quarter 2025 Results May 7, 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: 1st Quarter 2025 Review
1st Quarter 2025 Review $ 486M End of Quarter balance of cash, cash equivalents + investments3 $ 702M $ 40.7M 189.7M Subscription Annualized Adjusted EBITDA1 1 $ Recurring Revenue1 $ 2.3B 21% Ending backlog as of March 31, 2025 REVENUE 5 Adjusted EBITDA margin1 Enterprise & Tier 1 Digital Banking an
Slide 4: 1st Quarter 2025 Results
1st Quarter 2025 Results 1Q25 1Q24 We delivered strong results to start the year Totals Y/Y Change Totals with solid performance across the business. Our first quarter bookings performance was Revenue $189.7 15% $165.5 marked by significant renewals and expansion activity, demonstrating the GAAP end
Slide 5: 1st Quarter 2025 Highlights
1st Quarter 2025 Highlights New Customer Wins & Expansion Opportunities Subscription ARR Backlog 5 Tier 1 & Enterprise Wins in the Quarter $ 702 million Subscription Annualized Recurring Revenue $2.3 billion Total Committed Backlog • Signed five Tier 1 and Enterprise contracts in the quarter highlig
Slide 6: Annualized Recurring Revenue
Annualized Recurring Revenue Subscription ARR growth of 14%; Total ARR growth continues to be impacted by declines in non-Subscription ARR 14% 11% Y/Y Growth Y/Y Growth $ in Millions $ in Millions $702 $847 $761 $615 1Q24 1Q25 1Q24 1Q25 Subscription ARR Total ARR Subscription Annualized Recurring Re
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 $ 2.3B 20% Y/Y Growth 3% Seq. Growth RPO Balance as of March 31, 2025 $ in billions $ in billions RPO Expected to be % of Total RPO Recognized in the Amount $2.3 $2.
Slide 8: Revenue Breakout
Revenue Breakout Diverse base of customers across asset size and customer type Enterprise 10% Remaining Tier 1 Customers Credit Union 36% 25% 60% Non-FI's 10% Next 50 Asset Bank 64% Customer Customers Customer Tier 3 Size Type 26% Concentration 10% Other Next 10 11% Tier 2 Customers 34% 11% Largest
Slide 9: Financial Outlook
Financial Outlook Represents 11% to 12% full year revenue growth and full year adjusted EBITDA margin of approximately 22% 2Q 2025 Full Year 2025 Low High Low High Revenue $191.0 $195.0 $776.0 $783.0 Adj EBITDA $41.0 $44.0 $170.0 $175.0 $ In Millions $ In Millions As of May 7, 2025, Q2 Holdings is p
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 14% +5 Years 81% Subscription revenue Total Customers1 YoY Growth in Subscription ARR2 Avg. Contract Length3 as a % of Total4 460 +15% +26M 57% Avg. Customer Contracted R
Slide 13: Consolidated Balance Sheets
Q2 Holdings, Inc. Consolidated Condensed Consolidated Balance Sheets (in thousands) (unaudited) March 31, December 31, Balance Sheets 2025 2024 Assets Current assets: Cash and cash equivalents $ 383,902 $ 358,560 Restricted cash 1,575 2,233 Investments 102,147 88,066 Accounts receivable, net 62,597
Slide 14: Consolidated Statements of Comprehensive Income (Loss)
Q2 Holdings, Inc. Consolidated Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands, except per share data) Statements of (unaudited) Three Months Ended March 31, Comprehensive 2025 2024 Revenues $ 189,735 $ 165,508 Loss Cost of revenues (1) 88,745 83,256 Gross profit 100,9
Slide 15: Consolidated Statements of Cash Flows
Consolidated Statements of Q2 Holdings, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Cash Flows (unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income (loss) $ 4,753 $ (13,843) Adjustments to reconcile net income (loss) to net cash
Slide 16: Reconciliation of GAAP to Non-GAAP Measures
Q2 Holdings, Inc. Reconciliation of Reconciliation of GAAP to Non-GAAP Measures (in thousands) (unaudited) GAAP to Non-GAAP Three Months Ended March 31, 2025 2024 GAAP gross profit $ 100,990 $ 82,252 Stock-based compensation 3,218 3,165 Measures Amortization of acquired technology Lease and other re
Slide 17: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow Q2 Holdings, Inc. Reconciliation of Free Cash Flow (in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Net cash provided by operating activities $ 43,531 $ 13,436 Purchases of property and equipment (785) (1,405) Capitalized software development costs (
Slide 18: Definitions
Definitions Adjusted EBITDA: We define adjusted EBITDA as net income (loss) before stock-based compensation, transaction-related costs, depreciation, amortization, lease and other restructuring charges, non-recurring legal settlements, provision for income taxes and interest and other (income) expen
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