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Q2 Holdings, Inc. Announces Second Quarter 2021 Financial Results

Q2 Holdings, Inc. Announces Second Quarter 2021 Financial Results

Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for banking and lending, today announced results for its second quarter ending June 30, 2021.

GAAP Results for the Second Quarter 2021

  • Revenue for the second quarter of $123.6 million, up 27 percent year-over-year and up 6 percent from the first quarter of 2021.
  • GAAP gross margin for the second quarter of 44.8 percent, down from 45.5 percent for the prior-year quarter and 45.7 percent for the first quarter of 2021.
  • GAAP net loss for the second quarter of $30.1 million, compared to GAAP net losses of $39.0 million for the prior-year quarter and $25.7 million for the first quarter of 2021.

Non- GAAP Results for the Second Quarter 2021

  • Non-GAAP revenue for the second quarter of $124.2 million, up 26 percent year-over-year and up 6 percent from the first quarter of 2021.
  • Non-GAAP gross margin for the second quarter of 51.9 percent, down from 53.9 percent for the prior-year quarter and 52.6 percent for the first quarter of 2021.
  • Adjusted EBITDA for the second quarter of $9.9 million, up from $8.1 million for the prior-year quarter and consistent with $9.9 million for the first quarter of 2021.

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

“There were a number of key highlights across the business during the quarter,” said Matt Flake, Q2 CEO. “We had key wins in digital banking, lending, and banking-as-a-service, and we announced the launch of Q2 Innovation Studio, which gives our digital banking customers a powerful set of tools to bring innovation to their customers faster and differentiate their offerings. Given the state of our pipeline across the business, we're optimistic that deal activity will begin to return to pre-pandemic levels in the back half of the year.”

Second Quarter Highlights

  • Signed an Enterprise, Top-30 US bank to loan origination and ClickSWITCH contracts.
  • Signed a Tier 2 credit union to a large digital transformation contract for a broad set of solutions led by retail and small business digital banking.
  • Signed a Tier 1, $24 billion financial institution to both loan pricing and data platform as well as Centrix risk management contracts.
  • Signed a loan pricing and data platform contract with an existing Tier 1 digital banking customer, a $23 billion financial institution.
  • Exited the second quarter with over 18.8 million registered users on the Q2 Platform, representing 16 percent year-over-year growth and 3 percent sequential growth from the first quarter of 2021.

“We had a solid financial performance in the second quarter, delivering results which exceeded the high end of our revenue and adjusted EBTIDA guidance,” said David Mehok, Q2 CFO. “Our revenue overachievement combined with operational efficiencies afford us the ability to continue making strategic investments in opportunities that we believe will deliver long-term value creation. The visibility into the second half of the year is resulting in increased full-year guidance of both revenue and adjusted EBITDA.”

Financial outlook

As of August 4, 2021, Q2 Holdings is providing guidance for its third quarter of 2021 and revised guidance for its full-year 2021. The financial information below represents forward-looking, non-GAAP financial information, including estimates 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, partnership termination charges, loss on extinguishment of debt 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. However, 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 third quarter of 2021 as follows:

  • Total non-GAAP revenue of $125.0 million to $126.5 million, which would represent year-over-year growth of 19 percent to 21 percent.
  • Adjusted EBITDA of $6.2 million to $6.8 million.

Q2 Holdings is providing updated guidance for the full-year 2021 as follows:

  • Total non-GAAP revenue of $497.5 million to $499.5 million, which would represent year-over-year growth of 22 to 23 percent.
  • Adjusted EBITDA of $33.2 million to $34.7 million, representing 7 percent of non-GAAP revenue for the year.

Conference Call Details

 

 

Date:

Thursday, August 5, 2021

Time:

8:30 a.m. EDT

Hosts:

Matt Flake, CEO / David Mehok, CFO

Conference ID:

9212557

Registration:

http://www.directeventreg.com/registration/event/9212557

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.Q2.com/.

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

About Q2 Holdings, Inc.

Q2 is a financial experience company dedicated to providing digital banking and lending solutions to banks, credit unions, alternative finance, and fintech companies in the U.S. and internationally. With comprehensive end-to-end solution sets, Q2 enables its partners to provide cohesive, secure, data-driven experiences to every account holder – from consumer to small business and corporate. Headquartered in Austin, Texas, Q2 has offices throughout the world and is publicly traded on the NYSE under the stock symbol QTWO. To learn more, please visit Q2.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 non-GAAP diluted weighted-average 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, unoccupied lease charges, partnership termination charges, loss on extinguishment of debt, 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 expenses, 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, partnership termination charges, and the impact to deferred revenue from purchase accounting, and with respect to non-GAAP net income, amortization of debt discount and issuance costs and loss on extinguishment of debt. In the case of non-GAAP diluted weighted-average number of common shares outstanding, Q2 adjusts GAAP diluted weighted-average number of common shares outstanding by the weighted-average effect of potentially dilutive shares which include (i) employee equity incentive plans, excluding the impact of unrecognized stock-based compensation expense and (ii) convertible senior notes outstanding and related warrants including the anti-dilutive impact of the Company’s note hedge and capped call agreements on convertible senior notes outstanding.

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: the ability of Q2 Innovation Studio to allow our digital banking customers to bring innovation to their customers faster and differentiate their offerings; the state of our pipeline and resulting optimism in deal activity in the back half of the year; our positive financial results and the ability they afford us to continue making strategic investments in opportunities that we believe will deliver long-term value creation; 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 the adverse impacts of the COVID-19 pandemic on Q2’s business operations and on global economic and financial markets, including on Q2’s customers, partners and suppliers and employees and business, as well as 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 COVID-19, government actions or other factors continue to negatively impact or disrupt the markets for Q2’s solutions and that the markets for Q2’s solutions do not return to normal or 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 impact 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 or any future period, including that any declines in bookings growth may not impact Q2’s revenue and financial performance until future periods; (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 cyberattacks, data breaches and breaches of security measures within Q2’s products, systems and infrastructure or the products, systems and infrastructure of third parties upon which Q2 relies and the resultant costs and liabilities and harm to Q2’s business and reputation 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 2021 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 Q2 solutions internationally; and (t) the risk that Q2 debt repayment obligations may adversely affect its financial condition and cash flows from operations in the future and that Q2 may not be able to obtain capital when desired or needed on favorable terms.

Additional information relating to the uncertainty affecting the Q2 business is 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.Q2.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)
(unaudited)

June 30,

 

December 31,

2021

 

2020

Assets
Current assets:
Cash and cash equivalents

$

317,949

 

$

407,703

 

Restricted cash

 

2,978

 

 

3,482

 

Investments

 

93,342

 

 

131,352

 

Accounts receivable, net

 

38,692

 

 

36,430

 

Contract assets, current portion, net

 

1,234

 

 

1,088

 

Prepaid expenses and other current assets

 

9,435

 

 

8,861

 

Deferred solution and other costs, current portion

 

24,499

 

 

19,042

 

Deferred implementation costs, current portion

 

7,230

 

 

8,258

 

Total current assets

 

495,359

 

 

616,216

 

Property and equipment, net

 

65,448

 

 

49,558

 

Right of use assets

 

57,323

 

 

34,709

 

Deferred solution and other costs, net of current portion

 

31,504

 

 

32,782

 

Deferred implementation costs, net of current portion

 

17,865

 

 

15,184

 

Intangible assets, net

 

179,797

 

 

184,859

 

Goodwill

 

512,869

 

 

462,274

 

Contract assets, net of current portion and allowance

 

21,189

 

 

18,694

 

Other long-term assets

 

2,245

 

 

2,426

 

Total assets

$

1,383,599

 

$

1,416,702

 

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

$

56,034

 

$

57,047

 

Deferred revenues, current portion

 

89,159

 

 

81,935

 

Lease liabilities, current portion

 

7,842

 

 

6,844

 

Total current liabilities

 

153,035

 

 

145,826

 

Convertible notes, net of current portion

 

537,895

 

 

557,468

 

Deferred revenues, net of current portion

 

24,740

 

 

29,203

 

Lease liabilities, net of current portion

 

66,280

 

 

36,739

 

Other long-term liabilities

 

4,154

 

 

4,102

 

Total liabilities

 

786,104

 

 

773,338

 

 
Stockholders' equity:
Common stock

 

6

 

 

6

 

Additional paid-in capital

 

1,034,520

 

 

1,024,577

 

Accumulated other comprehensive loss

 

(62

)

 

(32

)

Accumulated deficit

 

(436,969

)

 

(381,187

)

Total stockholders' equity

 

597,495

 

 

643,364

 

Total liabilities and stockholders' equity

$

1,383,599

 

$

1,416,702

 

Q2 Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands, except per share data)

(unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,

2021

2020

2021

2020

 
Revenues (1)

$

123,573

 

$

97,581

 

$

240,093

 

$

189,961

 

Cost of revenues (2) (3)

 

68,233

 

 

53,203

 

 

131,552

 

 

106,310

 

Gross profit

 

55,340

 

 

44,378

 

 

108,541

 

 

83,651

 

 
Operating expenses:
Sales and marketing (2)

 

20,587

 

 

16,310

 

 

40,403

 

 

36,194

 

Research and development (2)

 

29,429

 

 

23,642

 

 

56,224

 

 

48,600

 

General and administrative (2)

 

18,704

 

 

17,203

 

 

37,538

 

 

36,313

 

Acquisition related costs (4)

 

1,188

 

 

1,127

 

 

2,038

 

 

(840

)

Amortization of acquired intangibles

 

4,563

 

 

4,491

 

 

8,982

 

 

8,982

 

Partnership termination charges

 

-

 

 

13,244

 

 

-

 

 

13,244

 

Unoccupied lease charges (5)

 

812

 

 

668

 

 

812

 

 

668

 

Total operating expenses

 

75,283

 

 

76,685

 

 

145,997

 

 

143,161

 

Loss from operations

 

(19,943

)

 

(32,307

)

 

(37,456

)

 

(59,510

)

Other income (expense), net

 

(10,006

)

 

(6,599

)

 

(18,013

)

 

(13,064

)

Loss before income taxes

 

(29,949

)

 

(38,906

)

 

(55,469

)

 

(72,574

)

Provision for income taxes

 

(178

)

 

(65

)

 

(313

)

 

(505

)

Net loss

$

(30,127

)

$

(38,971

)

$

(55,782

)

$

(73,079

)

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

 

(14

)

 

108

 

 

5

 

 

(14

)

Foreign currency translation adjustment

 

(37

)

 

3

 

 

(35

)

 

(52

)

Comprehensive loss

$

(30,178

)

$

(38,860

)

$

(55,812

)

$

(73,145

)

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

$

(0.53

)

$

(0.76

)

$

(0.99

)

$

(1.46

)

Weighted average common shares outstanding, basic and diluted

 

56,360

 

 

51,241

 

 

56,081

 

 

49,911

 

 

(1)

Includes deferred revenue reduction from purchase accounting of $0.6 million and $1.3 million for the three months ended June 30, 2021 and 2020, respectively, and $1.1 million and $2.8 million for the six months ended June 30, 2021 and 2020, respectively.
 

(2)

Includes stock-based compensation expense as follows:
Three Months Ended June 30, Six Months Ended June 30,

2021

2020

2021

2020

Cost of revenues

$

2,763

$

1,904

$

5,298

$

5,312

Sales and marketing

 

2,930

 

1,390

 

5,467

 

4,144

Research and development

 

3,506

 

3,109

 

6,651

 

6,879

General and administrative

 

4,428

 

4,380

 

9,306

 

8,984

Total stock-based compensation expense

$

13,627

$

10,783

$

26,722

$

25,319

(3)

Includes amortization of acquired technology of $5.6 million and $5.5 million for the three months ended June 30, 2021 and 2020, respectively, and $10.8 million and $10.9 million for the six months ended June 30, 2021 and 2020, respectively.
 
(4) The six months ended June 30, 2020 includes a $2.9 million reduction to estimated contingent consideration as a result of the actual contingent consideration calculated as of the final measurement date of March 31, 2020.
 
(5) Unoccupied lease charges include costs related to the early vacating of various facilities, partially offset by anticipated sublease income from these facilities. For the three and six months ended June 30, 2021, the charges related to an updated assessment of facilities in Georgia and Texas, and for the three and six months ended June 30, 2020, the charges related to the vacating of facilities in California.
Q2 Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Six Months Ended June 30,

2021

 

2020

Cash flows from operating activities:
Net loss

$

(55,782

)

$

(73,079

)

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

 

11,614

 

 

8,608

 

Depreciation and amortization

 

26,498

 

 

26,046

 

Amortization of debt issuance costs

 

1,045

 

 

945

 

Amortization of debt discount

 

13,054

 

 

10,177

 

Amortization of premiums on investments

 

458

 

 

83

 

Stock-based compensation expense

 

27,392

 

 

26,065

 

Deferred income taxes

 

72

 

 

311

 

Loss on extinguishment of debt

 

1,513

 

 

-

 

Other non-cash charges

 

1,221

 

 

940

 

Changes in operating assets and liabilities

 

(21,076

)

 

(27,310

)

Net cash provided by (used in) operating activities

 

6,009

 

 

(27,214

)

Cash flows from investing activities:
Net maturities of investments

 

37,558

 

 

19,556

 

Purchases of property and equipment

 

(14,379

)

 

(14,775

)

Business combinations, net of cash acquired

 

(64,652

)

 

-

 

Capitalization of software development costs

 

(2,307

)

 

(398

)

Net cash provided by (used in) investing activities

 

(43,780

)

 

4,383

 

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

 

-

 

 

311,636

 

Payments for repurchases of convertible notes

 

(63,692

)

 

-

 

Proceeds from bond hedges related to convertible notes

 

26,295

 

 

-

 

Payments for warrants related to convertible notes

 

(19,655

)

 

-

 

Proceeds from exercise of stock options to purchase common stock

 

4,565

 

 

4,216

 

Payment of contingent consideration

 

-

 

 

(16,862

)

Net cash provided by (used in) financing activities

 

(52,487

)

 

298,990

 

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

 

(90,258

)

 

276,159

 

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

 

411,185

 

 

103,562

 

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

$

320,927

 

$

379,721

 

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

Three Months Ended June 30,

 

Six Months Ended June 30,

2021

 

2020

 

2021

 

2020

 
GAAP revenue

$

123,573

 

$

97,581

 

$

240,093

 

$

189,961

 

Deferred revenue reduction from purchase accounting

 

595

 

 

1,321

 

 

1,123

 

 

2,763

 

Non-GAAP revenue

$

124,168

 

$

98,902

 

$

241,216

 

$

192,724

 

 
GAAP gross profit

$

55,340

 

$

44,378

 

$

108,541

 

$

83,651

 

Stock-based compensation

 

2,763

 

 

1,904

 

 

5,298

 

 

5,312

 

Amortization of acquired technology

 

5,604

 

 

5,452

 

 

10,761

 

 

10,929

 

Acquisition related costs

 

106

 

 

233

 

 

222

 

 

491

 

Deferred revenue reduction from purchase accounting

 

595

 

 

1,321

 

 

1,123

 

 

2,763

 

Non-GAAP gross profit

$

64,408

 

$

53,288

 

$

125,945

 

$

103,146

 

 
Non-GAAP gross margin:
Non-GAAP gross profit

$

64,408

 

$

53,288

 

$

125,945

 

$

103,146

 

Non-GAAP revenue

 

124,168

 

 

98,902

 

 

241,216

 

 

192,724

 

Non-GAAP gross margin

 

51.9

%

 

53.9

%

 

52.2

%

 

53.5

%

 
GAAP sales and marketing expense

$

20,587

 

$

16,310

 

$

40,403

 

$

36,194

 

Stock-based compensation

 

(2,930

)

 

(1,390

)

 

(5,467

)

 

(4,144

)

Non-GAAP sales and marketing expense

$

17,657

 

$

14,920

 

$

34,936

 

$

32,050

 

 
GAAP research and development expense

$

29,429

 

$

23,642

 

$

56,224

 

$

48,600

 

Stock-based compensation

 

(3,506

)

 

(3,109

)

 

(6,651

)

 

(6,879

)

Non-GAAP research and development expense

$

25,923

 

$

20,533

 

$

49,573

 

$

41,721

 

 
GAAP general and administrative expense

$

18,704

 

$

17,203

 

$

37,538

 

$

36,313

 

Stock-based compensation

 

(4,428

)

 

(4,380

)

 

(9,306

)

 

(8,984

)

Non-GAAP general and administrative expense

$

14,276

 

$

12,823

 

$

28,232

 

$

27,329

 

 
GAAP operating loss

$

(19,943

)

$

(32,307

)

$

(37,456

)

$

(59,510

)

Deferred revenue reduction from purchase accounting

 

595

 

 

1,321

 

 

1,123

 

 

2,763

 

Partnership termination charges

 

-

 

 

13,244

 

 

-

 

 

13,244

 

Stock-based compensation

 

13,627

 

 

10,783

 

 

26,722

 

 

25,319

 

Acquisition related costs

 

1,294

 

 

1,361

 

 

2,260

 

 

(348

)

Amortization of acquired technology

 

5,604

 

 

5,452

 

 

10,761

 

 

10,929

 

Amortization of acquired intangibles

 

4,563

 

 

4,491

 

 

8,982

 

 

8,982

 

Unoccupied lease charges

 

812

 

 

668

 

 

812

 

 

668

 

Non-GAAP operating income

$

6,552

 

$

5,013

 

$

13,204

 

$

2,047

 

 
GAAP net loss

$

(30,127

)

$

(38,971

)

$

(55,782

)

$

(73,079

)

Deferred revenue reduction from purchase accounting

 

595

 

 

1,321

 

 

1,123

 

 

2,763

 

Partnership termination charges

 

-

 

 

13,244

 

 

-

 

 

13,244

 

Loss on extinguishment of debt

 

1,513

 

 

-

 

 

1,513

 

 

-

 

Stock-based compensation

 

13,627

 

 

10,783

 

 

26,722

 

 

25,319

 

Acquisition related costs

 

1,294

 

 

1,361

 

 

2,260

 

 

(348

)

Amortization of acquired technology

 

5,604

 

 

5,452

 

 

10,761

 

 

10,929

 

Amortization of acquired intangibles

 

4,563

 

 

4,491

 

 

8,982

 

 

8,982

 

Unoccupied lease charges

 

812

 

 

668

 

 

812

 

 

668

 

Amortization of debt discount and issuance costs

 

7,093

 

 

5,632

 

 

14,099

 

 

11,122

 

Non-GAAP net income (loss)

$

4,974

 

$

3,981

 

$

10,490

 

$

(400

)

 
 
Reconciliation from diluted weighted-average number of common shares as reported to Non-GAAP diluted weighted-average number of common shares
Diluted weighted-average number of common shares, as reported

 

56,360

 

 

51,241

 

 

56,081

 

 

49,911

 

Non-GAAP weighted-average effect of potentially dilutive shares

 

1,025

 

 

1,870

 

 

1,365

 

 

-

 

Non-GAAP diluted weighted-average number of common shares

 

57,385

 

 

53,111

 

 

57,446

 

 

49,911

 

 
Calculation of non-GAAP income (loss) per share:
Non-GAAP net income (loss)

$

4,974

 

$

3,981

 

$

10,490

 

$

(400

)

Non-GAAP diluted weighted-average number of common shares

 

57,385

 

 

53,111

 

 

57,446

 

 

49,911

 

Non-GAAP net income (loss) per share

$

0.09

 

$

0.07

 

$

0.18

 

$

(0.01

)

 
Reconciliation of GAAP net loss to adjusted EBITDA:
GAAP net loss

$

(30,127

)

$

(38,971

)

$

(55,782

)

$

(73,079

)

Depreciation and amortization

 

13,586

 

 

13,029

 

 

26,498

 

 

26,046

 

Stock-based compensation

 

13,627

 

 

10,783

 

 

26,722

 

 

25,319

 

Provision for income taxes

 

178

 

 

65

 

 

313

 

 

505

 

Interest (income) expense, net

 

8,388

 

 

6,584

 

 

16,295

 

 

12,859

 

Acquisition related costs

 

1,294

 

 

1,361

 

 

2,260

 

 

(348

)

Unoccupied lease charges

 

812

 

 

668

 

 

812

 

 

668

 

Loss on extinguishment of debt

 

1,513

 

 

-

 

 

1,513

 

 

-

 

Deferred revenue reduction from purchase accounting

 

595

 

 

1,321

 

 

1,123

 

 

2,763

 

Partnership termination charges

 

-

 

 

13,244

 

 

-

 

 

13,244

 

Adjusted EBITDA

$

9,866

 

$

8,084

 

$

19,754

 

$

7,977

 

Q2 Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Revenue Guidance
(in thousands)
 
Q3 2021 Guidance Full Year 2021 Guidance
Low High Low High
 
GAAP revenue

$

124,448

$

125,948

$

495,377

$

497,377

Deferred revenue reduction from purchase accounting

 

552

 

552

 

2,123

 

2,123

Non-GAAP revenue

$

125,000

$

126,500

$

497,500

$

499,500

 

 

MEDIA CONTACT:
Maria Abbe
Q2 Holdings, Inc.
M: 315-657-0041
maria.abbe@Q2.com

INVESTOR CONTACT:
Josh Yankovich
Q2 Holdings, Inc.
O: 512-682-4463
josh.yankovich@Q2.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804006044/en/