Q2 Holdings, Inc. · NYSE:QTWO
Q2 — Q4 2022 Earnings Presentation
22 slides from Q2's earnings presentation, Feb 21, 2023
Slide 1: 4th Quarter and Full-Year 2022 Results
th 4 Quarter and Full-Year 2022 Results February 21, 2023 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: Full Year 2022 Review
Full Year 2022 Review $ 433.4M End of Year balance of cash, cash equivalents & investments3 $ 655.2M $ 36.9M 566.3M in Adjusted EBITDA4 End of Year Annualized Recurring Revenue1 $ 3 $1.49B ending backlog as of 13% December 31, 2022 NON-GAAP REVENUE non-GAAP revenue growth 19 year-over-year4 Enterpri
Slide 4: 4th Quarter & Full-Year 2022 Review
4th Quarter & Full-Year 2022 Review “We closed out the year with strong Customer execution across the business and 4Q’22 FY’22 Termination believe we have positioned ourselves Totals Y/Y Change Totals Y/Y Change Impact to 4Q’22 & FY’22 Results1 well to accelerate subscription revenue growth and impr
Slide 5: 4th Quarter Highlights
4th Quarter Highlights Continued Success Across the Business 1 Tier 1 Digital Banking Platform • • Tier 1 digital banking contract to utilize our commercial and SMB banking solutions. Tier 2 digital banking contract, our largest single deal in the quarter, to utilize our retail, small business, and
Slide 6: Annualized Recurring Revenue
Annualized Recurring Revenue Year-over-year growth driven largely by new and cross sale subscription-based bookings 14% Y/Y Growth 24% Y/Y Growth $655.2 $ in Millions $574.2 $464.2 2020 2021 2022 6
Slide 7: Remaining Performance Obligation, "Backlog"
Remaining Performance Obligation, “Backlog” Year-over-year growth driven from Net New Deals. Fourth quarter strongest bookings quarter in company history. $ 1.49B 6% Y/Y Growth 7% Q/Q Growth RPO Balance as of Dec 31, 2022 $ in Billions $ in Billions RPO Expected to % of Total RPO be Recognized in Am
Slide 8: Registered User Growth
Registered User Growth Full-Year User growth acceleration driven by increasing number of go-lives 8% 10% Y/Y Growth Y/Y Growth In Millions 21.1 19.2 17.8 Added over 1.9M Users in Full-Year 2022 2020 2021 2022 1 Registered Users as defined in the appendix of this presentation. 8
Slide 9: Revenue Growth from Existing Digital Banking Platform Customers
Revenue Growth from Existing Digital Banking Platform Customers Revenue growth over time driven by organic user growth and product adoption +54% +38% Contracted Revenue % Increase1 +24% +5% 12 Months 24 Months 36 Months 48 Months 1 Represents the average customer increase in contracted revenue from
Slide 10: Revenue Breakout
Revenue Breakout Diverse base of customers across asset size and customer type Largest Customer Next 10 4% Customers Enterprise Credit Union 14% 12% 26% Tier 1 Next 50 35% Customers Non-FI's 25% 13% ASSET Bank 61% CUSTOMER TOP SIZE TYPE CUSTOMERS Tier 3 12% Other 13% Remaining Tier 2 Customers 29% 5
Slide 11: Financial Outlook
Financial Outlook Representing 12-13% full year revenue growth and full year adjusted EBITDA margins of ~10% Q1 2023 Full Year 2023 Low High Low High Non-GAAP Revenue $149.0 $152.0 $632.0 $640.0 Adj EBITDA $10.0 $12.5 $62.0 $66.0 $ In Millions $ In Millions As of February 21, 2023, Q2 Holdings is pr
Slide 12: Appendix
Appendix The information in the following presentation is confidential and proprietary.
Slide 13: Strong Visibility, Increasing Profitability, Expanding Opportunity
Strong Visibility, Increasing Profitability, Expanding Opportunity Long Runway to sustain High Growth and Margin Expansion +1,400 Intermediate Target 14% +5 Years +70% Subscription revenue Total Customers1 YoY Growth in ARR2 Avg. Contract Length3 as a % of Total4 YoY Revenue Growth + Adj EBITDA Marg
Slide 14: Condensed Consolidated Balance Sheets
Condensed Q2 Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) Consolidated December 31, December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 199,600 $ 322,848 Balance Sheets Restricted cash 2,302 2,973 Investments 233,753 104,878 Accounts receivabl
Slide 15: Condensed Consolidated Statements of Comprehensive Loss
Condensed Q2 Holdings, Inc. Condensed Consolidated Statements of Comprehensive Loss Consolidated (in thousands, except per share data) (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 Statements of Revenues (1) Cost of revenues (2) Gross profit $ 146,5
Slide 16: Condensed Consolidated Statements of Cash Flows
Condensed Q2 Holdings, Inc. Condensed Consolidated Statements of Cash Flows Consolidated (in thousands) (unaudited) Twelve Months Ended December 31, 2022 2021 Statements of Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash from operating activities: $ (108,
Slide 17: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Q2 Holdings, Inc. Q2 Holdings, Inc. Reconciliation of GAAP to Non-GAAP Measures Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share data) (in thousands, except per share data) (unaudited) (unaudited) Three Months Ended December 31,
Slide 18: 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) Q1 2023 Outlook Full Year 2023 Outlook Low High Low High GAAP revenue $ 148,884 $ 151,884 $ 631,655 $ 639,655 Deferred revenue reduction from purchase accounting 11
Slide 19: Impacts of Customer Termination
Impacts of Customer Termination Q2 Holdings, Inc. Impacts of Impairment Charge (in thousands) Three Months Ended December 31, 2022 (unaudited) Impact to revenue: Accounts receivable and contract asset impairment charge $ (3,071) Impact to cost of revenue: Cost of revenues expenses 700 Impact to oper
Slide 20: Definitions
Definitions Adjusted EBITDA: We define adjusted EBITDA as net loss before depreciation, amortization, stock-based compensation, certain costs related to our recent acquisitions, (benefit from) provision for income taxes, interest and other (income) expense, net, deferred revenue reduction from purch
Slide 21: Definitions
Definitions Cloud Lending Platform: Our Q2 Cloud Lending, or CL, digital lending platform is a cloud-based, end-to-end lending solution that allows financial institutions, FinTechs and Alt-FIs to automate and digitize their lending activities, supporting digital lending applications, scoring, underw
Slide 22: Definitions
Definitions Non-GAAP Revenue: We define non-GAAP revenue as total revenue excluding the impact of purchase accounting. We monitor these measures to assess our performance because we believe our revenue growth rates would be understated without these adjustments. We believe presenting non-GAAP revenu