CORRECTING and REPLACING Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2019 Financial Results

AUSTIN, Texas–(BUSINESS WIRE)–The table labeled “Reconciliation of GAAP to Non-GAAP Revenue Guidance” has been replaced.

The corrected release reads:

Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2019 Financial Results

Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for banking and lending, today announced results for its fourth quarter ending Dec. 31, 2019.

GAAP Results for the Fourth Quarter and Full-Year 2019

  • Revenue for the fourth quarter of $86.8 million, up 29 percent year-over-year and up 9 percent from the previous quarter. Full-year 2019 revenue totaled $315.5 million, up 31 percent year-over-year.
  • GAAP gross margin for the fourth quarter of 48.4 percent, up from 47.3 percent for the prior-year quarter and down from 49.3 percent for the third quarter of 2019. GAAP gross margin for full-year 2019 of 48.5 percent, down from 49.5 percent for full-year 2018.
  • GAAP net loss for the fourth quarter of $15.7 million, compared to GAAP net losses of $11.9 million for the prior-year quarter and $18.6 million for the third quarter of 2019. GAAP net loss for full-year 2019 of $70.9 million, which compares to $35.4 million for full-year 2018.

Non-GAAP Results for the Fourth Quarter and Full-Year 2019

  • Non-GAAP revenue for the fourth quarter of $88.7 million, up 32 percent year-over-year and up 11 percent from the previous quarter. Full-year 2019 non-GAAP revenue totaled $317.3 million, up 32 percent year-over-year.
  • Non-GAAP gross margin for the fourth quarter of 56.8 percent, up from 52.0 percent for the prior-year quarter and from 53.6 percent for the third quarter of 2019. Non-GAAP gross margin for full-year 2019 of 54.0 percent, up from 53.3 percent for full-year 2018.
  • Adjusted EBITDA for the fourth quarter of $10.6 million, compared to $3.1 million for the prior-year quarter and $5.6 million for the third quarter of 2019. Full-year 2019 adjusted EBITDA of $19.6 million compared to $19.0 million for full-year 2018.

For a reconciliation of our GAAP to non-GAAP results, please see the tables below.

“2019 was a transformational year for Q2, and we rounded it out with a strong fourth quarter,” said Matt Flake, CEO of Q2. “Through our acquisition of PrecisionLender in the fourth quarter, we meaningfully expanded our capabilities and, as a result, our addressable market. Our sales teams turned in a quarter of strong net new, cross sale and renewal activity helping us achieve a significant milestone—ending the year with over $1 billion in committed backlog. As we look to 2020, I’m confident that our performance and broad solutions portfolio position us as a leader in digital transformation for global financial services.”

Fourth Quarter Highlights

  • Signed Two Tier 1 banks to digital banking contracts, including a Top 50 Bank in the United States.
  • Signed a major alternative lender in North America to a Cloud Lending contract, the largest Cloud Lending deal in company history.
  • Signed Two Tier 1 banks to PrecisionLender contracts, including a Top 5 Canadian Bank and a $15 billion bank in the Southeast.
  • Exited the fourth quarter with approximately 14.6 million registered users on the Q2 platform, representing 14 percent year-over-year and 4 percent sequential growth from the third quarter.

“We finished the year with solid execution and successfully closed on the acquisition of PrecisionLender,” said Jennifer Harris, CFO of Q2. “The acquisition, combined with our Tier 1 success, will result in heavier investments in the first half of 2020 as we continue to invest in integration, innovation and delivering successful client outcomes. Similar to 2019, we expect to see increased operating leverage and a return to positive Adjusted EBITDA in the second half of 2020.”

Financial Outlook

As of February 19, 2020, Q2 Holdings is providing guidance for its first quarter of 2020 and full-year 2020. The financial information below represents forward-looking non-GAAP financial information, including an estimate of non-GAAP revenue and adjusted EBITDA. GAAP net loss is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes items such as depreciation and amortization, stock-based compensation, acquisition-related costs, interest, income taxes, unoccupied lease charges and the impact to deferred revenue from purchase accounting. Q2 Holdings is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Q2 Holdings has not provided guidance for GAAP net loss or a reconciliation of the foregoing forward-looking adjusted EBITDA guidance to GAAP net loss, although it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods.

Q2 Holdings is providing guidance for its first-quarter 2020 as follows:

  • Total Non-GAAP revenue of $92.0 million to $94.0 million, which would represent year-over-year growth of 29 percent to 32 percent.
  • Adjusted EBITDA of negative $3.0 million to negative $2.0 million.

Q2 Holdings is providing guidance for the full-year 2020 as follows:

  • Total Non-GAAP revenue of $412.0 million to $416.0 million, which would represent year-over-year growth of 30 percent to 31 percent.
  • Adjusted EBITDA of $16.0 million to $19.0 million.

Conference Call Details

Date:

 

Feb. 20, 2020

Time:

 

8:30 a.m. EST

Hosts:

 

Matt Flake, CEO / Jennifer Harris, CFO

Dial in:

 

US toll free: 1-833-241-4254

 

 

International: 1-647-689-4205

Conference ID:

 

7507789

Please join the conference call at least 10 minutes early to ensure the line is connected. A live webcast of the conference call and financial results will be accessible from the investor relations section of the Q2 website at http://investors.q2ebanking.com/.

An archived replay of the webcast will be available at this website on a temporary basis shortly after the call.

About Q2 Holdings, Inc.

Q2 is a secure, cloud-based digital transformation solutions company headquartered in Austin, Texas. Since 2004, it has been our mission to build stronger communities by strengthening their financial institutions. Our digital banking solutions for deposits, money movement, lending, leasing, security and fraud enable financial institutions to deliver a better financial experience to their account holders. Our bank and credit union customers, along with emerging financial services providers, also benefit from actionable data analytics and access to open technology tools. To learn more about Q2, visit www.q2ebanking.com.

Use of Non-GAAP Measures

Q2 uses the following non-GAAP financial measures: non-GAAP revenue; adjusted EBITDA; non-GAAP gross margin; non-GAAP gross profit; non-GAAP sales and marketing expense; non-GAAP research and development expense; non-GAAP general and administrative expense; non-GAAP operating expense; non-GAAP operating income (loss); non-GAAP net income; non-GAAP net income per share; and pro forma weighted-average diluted number of common shares outstanding. Management believes that these non-GAAP financial measures are useful measures of operating performance because they exclude items that Q2 does not consider indicative of its core performance.

In the case of non-GAAP revenue, Q2 adjusts revenue to exclude the impact to deferred revenue from purchase accounting adjustments. In the case of adjusted EBITDA, Q2 adjusts net loss for such items as interest, taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, amortization of technology and intangibles, unoccupied lease charges and the impact to deferred revenue from purchase accounting. In the case of non-GAAP gross margin and non-GAAP gross profit, Q2 adjusts gross profit and gross margin for stock-based compensation amortization of acquired technology, acquisition-related costs and the impact to deferred revenue from purchase accounting. In the case of non-GAAP sales and marketing expense, non-GAAP research and development expense, and non-GAAP general and administrative expense, Q2 adjusts the corresponding GAAP expense to exclude stock-based compensation. Non-GAAP Operating Expense is calculated by taking the sum of non-GAAP sales and marketing expense, non-GAAP research and development expense, and non-GAAP general and administrative expense. In the case of non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share, Q2 adjusts operating loss and net loss, respectively, for stock-based compensation, acquisition related-costs, amortization of acquired technology, amortization of acquired intangibles, unoccupied lease charges, the impact to deferred revenue from purchase accounting, and with respect to non-GAAP net income, amortization of debt discount and issuance costs. In the case of pro forma diluted weighted average number of common shares outstanding, we adjust diluted weighted-average number of common shares outstanding by the weighted-average effect of potentially dilutive shares.

There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income (loss). As a result, these non-GAAP financial measures have limitations and should be considered in addition to, not as a substitute for or superior to, the closest GAAP measures, or other financial measures prepared in accordance with GAAP. A reconciliation to the closest GAAP measures of these non-GAAP measures is contained in tabular form on the attached unaudited condensed consolidated financial statements.

Q2’s management uses these non-GAAP measures as measures of operating performance; to prepare Q2’s annual operating budget; to allocate resources to enhance the financial performance of Q2’s business; to evaluate the effectiveness of Q2’s business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of Q2’s results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communication with our board of directors concerning Q2’s financial performance.

Forward-looking Statements

This press release contains forward-looking statements, including statements about positive sales and bookings momentum, the benefits of the PrecisionLender acquisition and its ability to drive growth and increase Q2’s total addressable market, Q2’s committed backlog, investments in innovation and integration, expectations regarding increased operating leverage and a return to positive Adjusted EBITDA in the second half of 2020 and Q2’s quarterly and annual financial guidance. The forward-looking statements contained in this press release are based upon Q2’s historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include risks related to: (a) the risk of increased competition in its existing markets and as it enters new sections of the market with Tier 1 customers, new markets with Alt-FIs and FinTechs and new products and services; (b) the risk that the market for Q2’s solutions does not grow as anticipated, in particular with respect to Tier 1 customers and Alt-FI and FinTech customers; (c) the risk that Q2’s increased focus on selling to larger Tier 1 customers may result in greater uncertainty and variability in Q2’s business and sales results; (d) the risk that changes in Q2’s market, business or sales organization negatively impacts its ability to sell its products and services; (e) the challenges and costs associated with selling, implementing and supporting Q2’s solutions, particularly for larger customers with more complex requirements and longer implementation processes, including risks related to the timing and predictability of sales of Q2’s solutions and the impact that the timing of bookings may have on Q2’s revenue and financial performance in a period; (f) the risk that errors, interruptions or delays in Q2’s products or services or Web hosting negatively impacts Q2’s business and sales; (g) risks associated with data breaches and breaches of security measures within Q2’s products, systems and infrastructure and the resultant harm to Q2’s business and its ability to sell its products and services; (h) the impact that a slowdown in the economy, financial markets and credit markets may have on Q2’s customers and Q2’s business sales cycles, prospects and customers’ spending decisions and timing of implementation decisions, particularly in regions where a significant number of Q2’s customers are concentrated; (i) the difficulties and risks associated with developing and selling complex new solutions and enhancements with the technical and regulatory specifications and functionality required by customers and governmental authorities; (j) the risks inherent in technology and implementation partnerships that could cause harm to Q2’s business; (k) the difficulties and costs Q2 may encounter with complex implementations of its solutions and the resulting impact on reputation and the timing of its revenue from any delayed implementations; (l) the risk that Q2 will not be able to maintain historical contract terms such as pricing and duration; (m) the risks associated with managing growth and the challenges associated with improving operations and hiring, retaining and motivating employees to support such growth; (n) the risk that modifications or negotiations of contractual arrangements will be necessary during Q2’s implementations of its solutions or the general risks associated with the complexity of Q2’s customer arrangements; (o) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (p) the risks associated with anticipated higher operating expenses in 2020 and beyond; (q) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (r) the risks associated with further consolidation in the financial services industry; (s) risks associated with selling our solutions internationally; and (t) the risk that our debt repayment obligations may adversely affect our financial condition and cash flows from operations in the future and that we may not be able to obtain capital when desired or needed on favorable terms.

Additional information relating to the uncertainty affecting the Q2 business are contained in Q2’s filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Q2’s website at http://investors.q2ebanking.com/. These forward-looking statements represent Q2’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Q2 disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

 

Q2 Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

December, 31

 

December, 31

 

 

 

2019

 

 

 

2018

 

 

 

(unaudited)

 

(unaudited)

Assets
Current assets:
Cash and cash equivalents

$

100,094

 

$

108,341

 

Restricted cash

 

3,468

 

 

1,815

 

Investments

 

32,325

 

 

68,979

 

Accounts receivable, net

 

22,442

 

 

19,668

 

Contract assets, current portion

 

872

 

 

598

 

Prepaid expenses and other current assets

 

6,354

 

 

3,983

 

Deferred solution and other costs, current portion

 

15,609

 

 

10,501

 

Deferred implementation costs, current portion

 

5,171

 

 

4,427

 

Total current assets

 

186,335

 

 

218,312

 

Property and equipment, net

 

39,252

 

 

34,994

 

Right of use assets

 

35,388

 

 

 

Deferred solution and other costs, net of current portion

 

29,220

 

 

16,761

 

Deferred implementation costs, net of current portion

 

15,848

 

 

9,948

 

Intangible assets, net

 

223,861

 

 

63,296

 

Goodwill

 

462,023

 

 

107,907

 

Contract assets, net of current portion

 

15,189

 

 

10,272

 

Other long-term assets

 

2,318

 

 

2,230

 

Total assets

$

1,009,434

 

$

463,720

 

 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities

$

65,976

 

$

31,150

 

Deferred revenues, current portion

 

57,850

 

 

42,531

 

Lease liabilities, current portion

 

9,140

 

 

 

Total current liabilities

 

132,966

 

 

73,681

 

Convertible notes, net of current portion

 

424,784

 

 

182,723

 

Deferred revenues, net of current portion

 

32,954

 

 

23,063

 

Deferred rent, net of current portion

 

 

 

8,151

 

Lease liabilities, net of current portion

 

36,079

 

 

 

Other long-term liabilities

 

3,239

 

 

17,202

 

Total liabilities

 

630,022

 

 

304,820

 

 
Stockholders’ equity:
Common stock

 

5

 

 

4

 

Additional paid-in capital

 

622,692

 

 

331,355

 

Accumulated other comprehensive income (loss)

 

14

 

 

(37

)

Accumulated deficit

 

(243,299

)

 

(172,422

)

Total stockholders’ equity

 

379,412

 

 

158,900

 

Total liabilities and stockholders’ equity

$

1,009,434

 

$

463,720

 

Q2 Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

(unaudited)(unaudited)(unaudited)(unaudited)
 
Revenues (1)

$

86,840

 

$

67,177

 

$

315,484

 

$

241,100

 

Cost of revenues (2) (3)

 

44,802

 

 

35,435

 

 

162,485

 

 

121,855

 

Gross profit

 

42,038

 

 

31,742

 

 

152,999

 

 

119,245

 

 
Operating expenses:
Sales and marketing (2)

 

16,576

 

 

13,583

 

 

63,947

 

 

48,124

 

Research and development (2)

 

19,881

 

 

15,517

 

 

76,273

 

 

51,334

 

General and administrative (2)

 

15,382

 

 

12,659

 

 

56,739

 

 

44,990

 

Acquisition related costs

 

8,574

 

 

1,820

 

 

16,027

 

 

4,145

 

Amortization of acquired intangibles

 

3,307

 

 

857

 

 

6,339

 

 

1,844

 

Unoccupied lease charges (4)

 

176

 

 

 

 

420

 

 

658

 

Total operating expenses

 

63,896

 

 

44,436

 

 

219,745

 

 

151,095

 

Loss from operations

 

(21,858

)

 

(12,694

)

 

(66,746

)

 

(31,850

)

Other income (expense), net

 

(5,988

)

 

(2,345

)

 

(16,618

)

 

(7,350

)

Loss before income taxes

 

(27,846

)

 

(15,039

)

 

(83,364

)

 

(39,200

)

Benefit from income taxes

 

12,180

 

 

3,176

 

 

12,487

 

 

3,803

 

Net loss

$

(15,666

)

$

(11,863

)

$

(70,877

)

$

(35,397

)

Other comprehensive loss:
Unrealized gain (loss) on available-for-sale investments

 

(24

)

 

(32

)

 

223

 

 

24

 

Foreign currency translation adjustment

 

(103

)

 

78

 

 

(172

)

 

78

 

Comprehensive loss

$

(15,793

)

$

(11,817

)

$

(70,826

)

$

(35,295

)

Net loss per common share:
Net loss per common share, basic and diluted

$

(0.32

)

$

(0.27

)

$

(1.53

)

$

(0.83

)

Weighted average common shares outstanding, basic and diluted

 

48,363

 

 

43,429

 

 

46,198

 

 

42,797

 

 
 
 

(1)

Includes deferred revenue reduction from purchase accounting of $1.8 million and zero for the three months ended December 31, 2019, and 2018, respectively, and $1.8 million and zero for the twelve months ended December 31, 2019, and 2018, respectively.
 

(2)

Includes stock-based compensation expenses as follows:

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

Cost of revenues

$

1,973

 

$

1,453

 

$

6,427

 

$

4,773

 

Sales and marketing

 

2,278

 

 

1,709

 

 

7,740

 

 

5,837

 

Research and development

 

2,781

 

 

2,172

 

 

9,864

 

 

6,852

 

General and administrative

 

3,811

 

 

3,289

 

 

15,347

 

 

11,758

 

Total stock-based compensation expenses

$

10,843

 

$

8,623

 

$

39,378

 

$

29,220

 

 

(3)

Includes amortization of acquired technology of $4.4 million and $1.7 million for the three months ended December 31, 2019 and 2018, respectively, and $9.9 million and $4.5 million for the twelve months ended December 31, 2019 and 2018, respectively.
 

(4)

Includes unoccupied lease charges related to the early exit of various leases of $0.2 million and zero for the three months ended December 31, 2019 and 2018, respectively, and $0.4 million and $0.7 million for the twelve months ended December 31, 2019 and 2018, respectively.
Q2 Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)

Twelve Months Ended December 31,

 

2019

 

 

 

2018

 

(unaudited)

 

(unaudited)

Cash flows from operating activities:
Net loss

$

(70,877

)

$

(35,397

)

Adjustments to reconcile net loss to net cash from operating activities:
Amortization of deferred implementation, solution and other costs

 

13,634

 

 

8,448

 

Depreciation and amortization

 

28,457

 

 

16,802

 

Amortization of debt issuance costs

 

1,467

 

 

829

 

Amortization of debt discount

 

15,154

 

 

7,646

 

Amortization of premiums on investments

 

226

 

 

(3

)

Stock-based compensation expenses

 

40,510

 

 

29,545

 

Deferred income taxes

 

(12,774

)

 

(2,050

)

Other non-cash charges

 

885

 

 

553

 

Changes in operating assets and liabilities

 

(16,115

)

 

(21,778

)

Net cash provided by operating activities

 

567

 

 

4,595

 

Cash flows from investing activities:
Net maturities (purchases) of investments

 

36,650

 

 

(27,267

)

Purchases of property and equipment

 

(13,860

)

 

(13,285

)

Business combinations, net of cash acquired

 

(505,577

)

 

(130,694

)

Purchases of intangible assets

 

(288

)

 

(46

)

Capitalization of software development costs

 

(177

)

 

 

Net cash used in investing activities

 

(483,252

)

 

(171,292

)

Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs

 

195,289

 

 

 

Proceeds from issuance of convertible notes, net of issuance costs

 

307,016

 

 

223,167

 

Purchase of capped call transactions

 

(40,765

)

 

 

Purchase of convertible notes bond hedge

 

 

 

(41,699

)

Proceeds from issuance of warrants

 

 

 

22,379

 

Proceeds from exercise of stock options to purchase common stock

 

14,551

 

 

12,730

 

Net cash provided by financing activities

 

476,091

 

 

216,577

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(6,594

)

 

49,880

 

Cash, cash equivalents, and restricted cash, beginning of period

 

110,156

 

 

60,276

 

Cash, cash equivalents, and restricted cash, end of period

$

103,562

 

$

110,156

 

Q2 Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share data)

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

GAAP revenue

$

86,840

 

$

67,177

 

$

315,484

 

$

241,100

 

Deferred revenue reduction from purchase accounting

 

1,829

 

 

 

 

1,829

 

 

 

Non-GAAP revenue

$

88,669

 

$

67,177

 

$

317,313

 

$

241,100

 

 

GAAP gross profit

$

42,038

 

$

31,742

 

$

152,999

 

$

119,245

 

Stock-based compensation

 

1,973

 

 

1,453

 

 

6,427

 

 

4,773

 

Amortization of acquired technology

 

4,357

 

 

1,729

 

 

9,871

 

 

4,465

 

Acquisition related costs

 

193

 

 

 

 

291

 

 

 

Deferred revenue reduction from purchase accounting

 

1,829

 

 

 

 

1,829

 

 

 

Non-GAAP gross profit

$

50,390

 

$

34,924

 

$

171,417

 

$

128,483

 

 

Non-GAAP gross margin:

Non-GAAP gross profit

$

50,390

 

$

34,924

 

$

171,417

 

$

128,483

 

Non-GAAP revenue

 

88,669

 

 

67,177

 

 

317,313

 

 

241,100

 

Non-GAAP gross margin

 

56.8

%

 

52.0

%

 

54.0

%

 

53.3

%

 

GAAP sales and marketing expense

$

16,576

 

$

13,583

 

$

63,947

 

$

48,124

 

Stock-based compensation

 

(2,278

)

 

(1,709

)

 

(7,740

)

 

(5,837

)

Non-GAAP sales and marketing expense

$

14,298

 

$

11,874

 

$

56,207

 

$

42,287

 

 

GAAP research and development expense

$

19,881

 

$

15,517

 

$

76,273

 

$

51,334

 

Stock-based compensation

 

(2,781

)

 

(2,172

)

 

(9,864

)

 

(6,852

)

Non-GAAP research and development expense

$

17,100

 

$

13,345

 

$

66,409

 

$

44,482

 

 

GAAP general and administrative expense

$

15,382

 

$

12,659

 

$

56,739

 

$

44,990

 

Stock-based compensation

 

(3,811

)

 

(3,289

)

 

(15,347

)

 

(11,758

)

Non-GAAP general and administrative expense

$

11,571

 

$

9,370

 

$

41,392

 

$

33,232

 

 

GAAP operating loss

$

(21,858

)

$

(12,694

)

$

(66,746

)

$

(31,850

)

Deferred revenue reduction from purchase accounting

 

1,829

 

 

 

 

1,829

 

 

 

Stock-based compensation

 

10,843

 

 

8,623

 

 

39,378

 

 

29,220

 

Acquisition related costs

 

8,766

 

 

1,820

 

 

16,316

 

 

4,145

 

Amortization of acquired technology

 

4,357

 

 

1,729

 

 

9,871

 

 

4,465

 

Amortization of acquired intangibles

 

3,307

 

 

857

 

 

6,339

 

 

1,844

 

Unoccupied lease charges

 

176

 

 

 

 

420

 

 

658

 

Non-GAAP operating income

$

7,420

 

$

335

 

$

7,407

 

$

8,482

 

 

GAAP net loss

$

(15,666

)

$

(11,863

)

$

(70,877

)

$

(35,397

)

Deferred revenue reduction from purchase accounting

 

1,829

 

 

 

 

1,829

 

 

 

Stock-based compensation

 

10,843

 

 

8,623

 

 

39,378

 

 

29,220

 

Acquisition related costs

 

8,766

 

 

1,820

 

 

16,316

 

 

4,145

 

Amortization of acquired technology

 

4,357

 

 

1,729

 

 

9,871

 

 

4,465

 

Amortization of acquired intangibles

 

3,307

 

 

857

 

 

6,339

 

 

1,844

 

Unoccupied lease charges

 

176

 

 

 

 

420

 

 

658

 

Amortization of debt discount and issuance costs

 

5,519

 

 

2,518

 

 

16,672

 

 

8,475

 

Non-GAAP net income

$

19,131

 

$

3,684

 

$

19,948

 

$

13,410

 

 

Reconciliation from diluted weighted-average number of common shares

as reported to pro forma diluted weighted average number of common shares

Diluted weighted-average number of common shares, as reported

 

48,363

 

 

43,429

 

 

46,198

 

 

42,797

 

Weighted-average effect of potentially dilutive shares

 

2,148

 

 

1,901

 

 

2,448

 

 

2,145

 

Pro forma diluted weighted-average number of common shares

 

50,511

 

 

45,330

 

 

48,646

 

 

44,942

 

 

Calculation of non-GAAP income per share:

Non-GAAP net income

$

19,131

 

$

3,684

 

$

19,948

 

$

13,410

 

Pro forma diluted weighted-average number of common shares

 

50,511

 

 

45,330

 

 

48,646

 

 

44,942

 

Non-GAAP net income per share

$

0.38

 

$

0.08

 

$

0.41

 

$

0.30

 

 

Reconciliation of GAAP net loss to adjusted EBITDA:

GAAP net loss

$

(15,666

)

$

(11,863

)

$

(70,877

)

$

(35,397

)

Depreciation and amortization

 

10,729

 

 

5,361

 

 

28,457

 

 

16,802

 

Stock-based compensation

 

10,843

 

 

8,623

 

 

39,378

 

 

29,220

 

Benefit from income taxes

 

(12,180

)

 

(3,176

)

 

(12,487

)

 

(3,803

)

Interest (income) expense, net

 

6,064

 

 

2,345

 

 

16,572

 

 

7,350

 

Acquisition related costs

 

8,766

 

 

1,820

 

 

16,316

 

 

4,145

 

Unoccupied lease charges

 

176

 

 

 

 

420

 

 

658

 

Deferred revenue reduction from purchase accounting

 

1,829

 

 

 

 

1,829

 

 

 

Adjusted EBITDA

$

10,561

 

$

3,110

 

$

19,608

 

$

18,975

 

Contacts

MEDIA CONTACT:
Beth Williams
Q2 Holdings, Inc.
O: 512.685.2023

beth.williams@q2ebanking.com

INVESTOR CONTACT:
Josh Yankovich or Steve Calk
Q2 Holdings, Inc.
O: (512) 682-4463

josh.yankovich@q2ebanking.com
stephen.calk@q2ebanking.com

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