Q2 Holdings, Inc. · NYSE:QTWO
Q2 — Q1 2024 Earnings Presentation
19 slides from Q2's earnings presentation, May 1, 2024
Slide 1: 1st Quarter 2024 Results
st 1 Quarter 2024 Results May 1, 2024 The information in the following presentation is confidential and proprietary.
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 2024 Review
1st Quarter 2024 Review $ 338.5M End of Quarter balance of cash, cash equivalents & investments3 $ 615.1M $ 25.2M Adjusted EBITDA4 165.5M Subscription Annualized 4 Recurring Revenue1 $ $1.92B Ending backlog as of March 31, 2024 NON-GAAP REVENUE 15% 6 Adjusted EBITDA margin4 Tier One Digital Banking
Slide 4: 1st Quarter 2024 Results
1st Quarter 2024 Results We had a strong start to the year with highlights across the business. We saw 1Q’24 1Q’23 continued favorable sales execution with a broad mix of new and expansion wins in Totals Y/Y Change Totals the quarter. Revenue $165,508 8% $153,008 Our single-platform approach that al
Slide 5: 1st Quarter 2024 Highlights
1st Quarter 2024 Highlights WINS WINS SUBSCRIPTION REVENUE BACKLOG 4 Tier 1 Digital Banking Platform 2 Tier 1 Digital Lending Platform $ 615.1million Subscription Annualized $1.9 billion Total Committed Backlog Recurring Revenue 18 YoY % 25 YoY % • Two new banks to utilize our • Two Tier 1 expansion
Slide 6: Annualized Recurring Revenue
Annualized Recurring Revenue Year-over-year Subscription ARR growth of 18%; Total ARR growth impacted by continued pressure in non-Subscription ARR 13% 18% Y/Y Growth Y/Y Growth $800 $700 $ in Millions $700 $600 $ in Millions $600 $500 $500 $400 $400 $761.0 $300 $615.1 $672.7 $521.3 $300 $200 $200 $
Slide 7: Remaining Performance Obligations (RPO, Backlog)
Remaining Performance Obligations (RPO, Backlog) Record year-over-year growth across net new and expansion-based bookings $1.92B 25% 5% Q/Q Growth Y/Y Growth RPO Balance as of March 31, 2024 $ in Billions $ in Billions RPO Expected to % of Total RPO be Recognized in Amount the Next: $1.92 $1.92 $1.8
Slide 8: Financial Outlook
Financial Outlook Represents 10% to 11% full year Non-GAAP revenue growth; full year adjusted EBITDA margin of 16% to 17% Q2 2024 Full Year 2024 Low High Low High Non-GAAP Revenue $169.0 $172.0 $686.0 $692.0 Adj EBITDA $26.0 $28.0 $110.0 $114.0 $ In Millions $ In Millions 8
Slide 9: Appendix
Appendix The information in the following presentation is confidential and proprietary.
Slide 10: Strong Visibility, Increasing Profitability, Expanding Opportunity
Strong Visibility, Increasing Profitability, Expanding Opportunity Long Runway to sustain High Growth and Margin Expansion Late 2024 Target +1,400 18% +5 Years 79 % Total Customers1 YoY Growth in Avg. Contract Length3 Subscription revenue Rule of ~30 as a % of Total4 % Subscription ARR2 450 +110% +2
Slide 11: Condensed Consolidated Balance Sheets
Condensed Q2 Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) March 31, December 31, Consolidated Assets Current assets: Cash and cash equivalents $ 2024 274,522 $ 2023 229,655 Balance Sheets Restricted cash 4,257 3,977 Investments 63,939 94,353 Accounts receivable, ne
Slide 12: Condensed Consolidated Statements of Comprehensive Income (Loss)
Condensed Q2 Holdings, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands, except per share data) Consolidated (unaudited) Three Months Ended March 31, 2024 2023 Statements of Revenues (1) Cost of revenues Gross profit (2) $ 165,508 83,256 82,252 $ 153,008 79,711 73,
Slide 13: Condensed Consolidated Statements of Cash Flows
Condensed Q2 Holdings, Inc. Condensed Consolidated Statements of Cash Flows Consolidated (in thousands) (unaudited) Three Months Ended March 31 2024 2023 Statements of Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash from operating activities: $ (13,843) $
Slide 14: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Q2 Holdings, Inc. Reconciliation of GAAP to Non-GAAP Measures (in thousands) (unaudited) Three Months Ended March 31 2024 2023 GAAP revenue $ 165,508 $ 153,008 Deferred revenue reduction from purchase accounting - 116 Non-GAAP revenue $ 165,508 $ 153,124 G
Slide 15: 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, 2024 2023 Net cash provided by operating activities $ 13,436 $ 3,894 Purchases of property and equipment (1,405) (1,032) Capitalized software development costs
Slide 16: Reconciliation of GAAP to Non-GAAP Revenue Guidance
Reconciliation of GAAP to Non-GAAP Revenue Guidance Q2 Holdings, Inc. Reconciliation of GAAP to Non-GAAP Revenue Outlook (in thousands) Q2 2024 Outlook Full Year 2024 Outlook Low High Low High GAAP revenue $ 169,000 $ 172,000 $ 686,000 $ 692,000 Deferred revenue reduction from purchase accounting -
Slide 17: Definitions
Definitions Adjusted EBITDA: We define adjusted EBITDA as net 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 extinguishment
Slide 18: Definitions
Definitions Customer Tiering: For our financial institution customers, we may refer to their designated tiering, which we use to group customers based upon the total assets they report. We define “Enterprise” customers as having total assets equal to or greater than $50 billion. We define “Tier 1” c
Slide 19: 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