Press Release Details

Q2 Holdings, Inc. Announces Third Quarter 2021 Financial Results

November 3, 2021

AUSTIN, Texas--(BUSINESS WIRE)-- Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for banking and lending, today announced results for its third quarter ending September 30, 2021.

GAAP Results for the Third Quarter 2021

  • Revenue for the third quarter of $126.7 million, up 22 percent year-over-year and up 3 percent from the second quarter of 2021.
  • GAAP gross margin for the third quarter of 45.0 percent, up from 44.7 percent for the prior-year quarter and 44.8 percent for the second quarter of 2021.
  • GAAP net loss for the third quarter of $31.6 million, compared to GAAP net losses of $26.7 million for the prior-year quarter and $30.1 million for the second quarter of 2021.

Non-GAAP Results for the Third Quarter 2021

  • Non-GAAP revenue for the third quarter of $127.3 million, up 22 percent year-over-year and up 3 percent from the second quarter of 2021.
  • Non-GAAP gross margin for the third quarter of 51.9 percent, down from 52.5 percent for the prior-year quarter and flat versus 51.9 percent for the second quarter of 2021.
  • Adjusted EBITDA for the third quarter of $7.3 million, down from $8.1 million for the prior-year quarter and $9.9 million for the second quarter of 2021.

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

“In the third quarter, we experienced strong sales performance consistent with our previous belief that the buying environment would steadily improve in the back half of 2021,” said Matt Flake, Q2 CEO. “We saw substantial growth in net new bookings in addition to continued strength in expansion activity. The variety of deals we signed in the quarter across our portfolio demonstrates that our vision and strategy are resonating with the market. Looking ahead, I believe our deal activity, pipeline, and the strength of our product portfolio position us for continued success for the remainder of the year and into 2022.”

Third Quarter Highlights

  • Signed a Tier 1, Top 10 credit union to a digital banking contract for our commercial banking, risk management and business account opening solutions.
  • Signed a Tier 1 bank to a contract for our full digital banking suite, including retail, small business and commercial banking solutions.
  • Signed a Tier 1 bank, an existing client, to a digital banking contract for our retail digital banking and account onboarding solutions.
  • Signed a Tier 2 bank to a large digital transformation contract for a broad set of solutions led by retail digital banking and loan origination.
  • Signed a large loan pricing contract extension to expand existing functionality with an existing global enterprise bank customer.
  • Supported a new program launch with one of the largest fintechs in the United States, utilizing our BaaS platform.
  • Exited the third quarter with approximately 19.2 million registered users on the Q2 Platform, representing 12 percent year-over-year growth and 2 percent sequential growth.

“We delivered third quarter financial results that exceeded the high end of our revenue and adjusted EBITDA guidance,” said David Mehok, Q2 CFO. “The performance in the quarter was driven by our continued ability to efficiently deliver solutions to our customers in a timely manner, as well as solid organic growth contribution from existing customers. Based on our strong performance in the third quarter and visibility into the fourth quarter, we are raising our guidance for both revenue and adjusted EBITDA for the remainder of the year.”

Financial outlook

As of November 3, 2021, Q2 Holdings is providing guidance for its fourth 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 fourth quarter of 2021 as follows:

  • Total non-GAAP revenue of $131.3 million to $132.8 million, which would represent year-over-year growth of 20 to 21 percent.
  • Adjusted EBITDA of $7.3 million to $7.9 million.

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

  • Total non-GAAP revenue of $499.8 million to $501.3 million, which would represent year-over-year growth of 23 percent.
  • Adjusted EBITDA of $34.4 million to $35.0 million, representing 7 percent of non-GAAP revenue for the year.
 

Conference Call Details

 

Date:

Thursday, November 4, 2021

Time:

8:30 a.m. EDT

Hosts:

Matt Flake, CEO / David Mehok, CFO / Jonathan Price, EVP, Emerging Businesses, Corporate & Business Development

Conference ID:

6574867

Registration:

http://www.directeventreg.com/registration/event/6574867

 

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: sales performance; improvement in the buying environment; strength in expansion activity; market acceptance of our vision and strategy; the ability of our deal activity, pipeline, and the strength of our product portfolio to position us for continued success for the remainder of the year and into 2022; 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 performance 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)

September 30,

December 31,

2021

2020

Assets
Current assets:
Cash and cash equivalents

$

294,771

 

$

407,703

 

Restricted cash

 

2,972

 

 

3,482

 

Investments

 

99,805

 

 

131,352

 

Accounts receivable, net

 

53,499

 

 

36,430

 

Contract assets, current portion, net

 

1,263

 

 

1,088

 

Prepaid expenses and other current assets

 

21,059

 

 

8,861

 

Deferred solution and other costs, current portion

 

23,377

 

 

19,042

 

Deferred implementation costs, current portion

 

7,335

 

 

8,258

 

Total current assets

 

504,081

 

 

616,216

 

Property and equipment, net

 

66,919

 

 

49,558

 

Right of use assets

 

54,012

 

 

34,709

 

Deferred solution and other costs, net of current portion

 

28,596

 

 

32,782

 

Deferred implementation costs, net of current portion

 

18,424

 

 

15,184

 

Intangible assets, net

 

170,960

 

 

184,859

 

Goodwill

 

512,869

 

 

462,274

 

Contract assets, net of current portion and allowance

 

21,704

 

 

18,694

 

Other long-term assets

 

2,082

 

 

2,426

 

Total assets

$

1,379,647

 

$

1,416,702

 

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

$

55,161

 

$

57,047

 

Deferred revenues, current portion

 

100,119

 

 

81,935

 

Lease liabilities, current portion

 

8,658

 

 

6,844

 

Total current liabilities

 

163,938

 

 

145,826

 

Convertible notes, net of current portion

 

544,703

 

 

557,468

 

Deferred revenues, net of current portion

 

20,552

 

 

29,203

 

Lease liabilities, net of current portion

 

63,700

 

 

36,739

 

Other long-term liabilities

 

5,025

 

 

4,102

 

Total liabilities

 

797,918

 

 

773,338

 

 
Stockholders' equity:
Common stock

 

6

 

 

6

 

Additional paid-in capital

 

1,050,182

 

 

1,024,577

 

Accumulated other comprehensive income (loss)

 

93

 

 

(32

)

Accumulated deficit

 

(468,552

)

 

(381,187

)

Total stockholders' equity

 

581,729

 

 

643,364

 

Total liabilities and stockholders' equity

$

1,379,647

 

$

1,416,702

 

 

Q2 Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands, except per share data)

(unaudited)

 

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

 
Revenues (1)

$

126,736

 

$

103,804

 

$

366,829

 

$

293,765

 

Cost of revenues (2) (3)

 

69,726

 

 

57,366

 

 

201,278

 

 

163,676

 

Gross profit

 

57,010

 

 

46,438

 

 

165,551

 

 

130,089

 

 
Operating expenses:
Sales and marketing (2)

 

22,664

 

 

18,403

 

 

63,067

 

 

54,597

 

Research and development (2)

 

30,763

 

 

23,568

 

 

86,987

 

 

72,168

 

General and administrative (2)

 

20,352

 

 

17,563

 

 

57,890

 

 

53,876

 

Acquisition related costs (4)

 

476

 

 

818

 

 

2,514

 

 

(22

)

Amortization of acquired intangibles

 

4,483

 

 

4,465

 

 

13,465

 

 

13,447

 

Partnership termination charges

 

-

 

 

-

 

 

-

 

 

13,244

 

Unoccupied lease charges (5)

 

1,244

 

 

1,468

 

 

2,056

 

 

2,136

 

Total operating expenses

 

79,982

 

 

66,285

 

 

225,979

 

 

209,446

 

Loss from operations

 

(22,972

)

 

(19,847

)

 

(60,428

)

 

(79,357

)

Other income (expense), net

 

(8,015

)

 

(6,757

)

 

(26,028

)

 

(19,821

)

Loss before income taxes

 

(30,987

)

 

(26,604

)

 

(86,456

)

 

(99,178

)

Provision for income taxes

 

(596

)

 

(116

)

 

(909

)

 

(621

)

Net loss

$

(31,583

)

$

(26,720

)

$

(87,365

)

$

(99,799

)

Other comprehensive loss:
Unrealized loss on available-for-sale investments

 

(8

)

 

(52

)

 

(3

)

 

(66

)

Foreign currency translation adjustment

 

163

 

 

66

 

 

128

 

 

14

 

Comprehensive loss

$

(31,428

)

$

(26,706

)

$

(87,240

)

$

(99,851

)

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

$

(0.56

)

$

(0.50

)

$

(1.55

)

$

(1.95

)

Weighted average common shares outstanding, basic and diluted

 

56,559

 

 

53,574

 

 

56,242

 

 

51,141

 

 
 
(1) Includes deferred revenue reduction from purchase accounting of $0.6 million and $1.0 million for the three months ended September 30, 2021 and 2020, respectively, and $1.7 million and $3.7 million for the nine months ended September 30, 2021 and 2020, respectively.
(2) Includes stock-based compensation expense as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Cost of revenues

$

2,728

$

2,110

$

8,026

$

7,422

Sales and marketing

 

2,885

 

2,209

 

8,352

 

6,353

Research and development

 

3,388

 

2,901

 

10,039

 

9,780

General and administrative

 

5,068

 

4,376

 

14,374

 

13,360

Total stock-based compensation expense

$

14,069

$

11,596

$

40,791

$

36,915

 
(3) Includes amortization of acquired technology of $5.6 million and $5.3 million for the three months ended September 30, 2021 and 2020, respectively, and $16.4 million and $16.2 million for the nine months ended September 30, 2021 and 2020, respectively.
(4) The nine months ended September 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 nine months ended September 30, 2021, the charges related to an updated assessment and vacating of facilities in Georgia, Texas, North Carolina and Nebraska, and for the three and nine months ended September 30, 2020, the charges related to the vacating of facilities in California, North Carolina, and Texas.
 

Q2 Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Nine Months Ended September 30,

2021

2020

Cash flows from operating activities:
Net loss

$

(87,365

)

$

(99,799

)

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

 

17,394

 

 

13,947

 

Depreciation and amortization

 

40,580

 

 

38,975

 

Amortization of debt issuance costs

 

1,550

 

 

1,427

 

Amortization of debt discount

 

19,398

 

 

15,381

 

Amortization of premiums on investments

 

751

 

 

114

 

Stock-based compensation expense

 

41,796

 

 

38,076

 

Deferred income taxes

 

52

 

 

313

 

Loss on extinguishment of debt

 

1,513

 

 

-

 

Other non-cash charges

 

2,517

 

 

2,522

 

Changes in operating assets and liabilities

 

(46,572

)

 

(32,935

)

Net cash used in operating activities

 

(8,386

)

 

(21,979

)

Cash flows from investing activities:
Net maturities of investments

 

30,793

 

 

1,252

 

Purchases of property and equipment

 

(16,059

)

 

(16,538

)

Business combinations, net of cash acquired

 

(64,652

)

 

-

 

Capitalization of software development costs

 

(3,908

)

 

(653

)

Net cash used in investing activities

 

(53,826

)

 

(15,939

)

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

 

-

 

 

311,321

 

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

 

5,822

 

 

8,568

 

Payment of contingent consideration

 

-

 

 

(16,862

)

Net cash provided by (used in) financing activities

 

(51,230

)

 

303,027

 

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

 

(113,442

)

 

265,109

 

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

 

411,185

 

 

103,562

 

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

$

297,743

 

$

368,671

 

 

Q2 Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share data)

(unaudited)

 

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

 
GAAP revenue

$

126,736

 

$

103,804

 

$

366,829

 

$

293,765

 

Deferred revenue reduction from purchase accounting

 

554

 

 

957

 

 

1,677

 

 

3,720

 

Non-GAAP revenue

$

127,290

 

$

104,761

 

$

368,506

 

$

297,485

 

 
GAAP gross profit

$

57,010

 

$

46,438

 

$

165,551

 

$

130,089

 

Stock-based compensation

 

2,728

 

 

2,110

 

 

8,026

 

 

7,422

 

Amortization of acquired technology

 

5,604

 

 

5,255

 

 

16,365

 

 

16,184

 

Acquisition related costs

 

105

 

 

244

 

 

327

 

 

735

 

Deferred revenue reduction from purchase accounting

 

554

 

 

957

 

 

1,677

 

 

3,720

 

Non-GAAP gross profit

$

66,001

 

$

55,004

 

$

191,946

 

$

158,150

 

 
Non-GAAP gross margin:
Non-GAAP gross profit

$

66,001

 

$

55,004

 

$

191,946

 

$

158,150

 

Non-GAAP revenue

 

127,290

 

 

104,761

 

 

368,506

 

 

297,485

 

Non-GAAP gross margin

 

51.9

%

 

52.5

%

 

52.1

%

 

53.2

%

 
GAAP sales and marketing expense

$

22,664

 

$

18,403

 

$

63,067

 

$

54,597

 

Stock-based compensation

 

(2,885

)

 

(2,209

)

 

(8,352

)

 

(6,353

)

Non-GAAP sales and marketing expense

$

19,779

 

$

16,194

 

$

54,715

 

$

48,244

 

 
GAAP research and development expense

$

30,763

 

$

23,568

 

$

86,987

 

$

72,168

 

Stock-based compensation

 

(3,388

)

 

(2,901

)

 

(10,039

)

 

(9,780

)

Non-GAAP research and development expense

$

27,375

 

$

20,667

 

$

76,948

 

$

62,388

 

 
GAAP general and administrative expense

$

20,352

 

$

17,563

 

$

57,890

 

$

53,876

 

Stock-based compensation

 

(5,068

)

 

(4,376

)

 

(14,374

)

 

(13,360

)

Non-GAAP general and administrative expense

$

15,284

 

$

13,187

 

$

43,516

 

$

40,516

 

 
GAAP operating loss

$

(22,972

)

$

(19,847

)

$

(60,428

)

$

(79,357

)

Deferred revenue reduction from purchase accounting

 

554

 

 

957

 

 

1,677

 

 

3,720

 

Partnership termination charges

 

-

 

 

-

 

 

-

 

 

13,244

 

Stock-based compensation

 

14,069

 

 

11,596

 

 

40,791

 

 

36,915

 

Acquisition related costs

 

581

 

 

1,062

 

 

2,841

 

 

714

 

Amortization of acquired technology

 

5,604

 

 

5,255

 

 

16,365

 

 

16,184

 

Amortization of acquired intangibles

 

4,483

 

 

4,465

 

 

13,465

 

 

13,447

 

Unoccupied lease charges

 

1,244

 

 

1,468

 

 

2,056

 

 

2,136

 

Non-GAAP operating income

$

3,563

 

$

4,956

 

$

16,767

 

$

7,003

 

 
GAAP net loss

$

(31,583

)

$

(26,720

)

$

(87,365

)

$

(99,799

)

Deferred revenue reduction from purchase accounting

 

554

 

 

957

 

 

1,677

 

 

3,720

 

Partnership termination charges

 

-

 

 

-

 

 

-

 

 

13,244

 

Loss on extinguishment of debt

 

-

 

 

-

 

 

1,513

 

 

-

 

Stock-based compensation

 

14,069

 

 

11,596

 

 

40,791

 

 

36,915

 

Acquisition related costs

 

581

 

 

1,062

 

 

2,841

 

 

714

 

Amortization of acquired technology

 

5,604

 

 

5,255

 

 

16,365

 

 

16,184

 

Amortization of acquired intangibles

 

4,483

 

 

4,465

 

 

13,465

 

 

13,447

 

Unoccupied lease charges

 

1,244

 

 

1,468

 

 

2,056

 

 

2,136

 

Amortization of debt discount and issuance costs

 

6,849

 

 

5,686

 

 

20,948

 

 

16,808

 

Non-GAAP net income

$

1,801

 

$

3,769

 

$

12,291

 

$

3,369

 

 
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

 

56,559

 

 

53,574

 

 

56,242

 

 

51,141

 

Non-GAAP weighted-average effect of potentially dilutive shares

 

802

 

 

2,013

 

 

1,148

 

 

1,990

 

Non-GAAP diluted weighted-average number of common shares

 

57,361

 

 

55,587

 

 

57,390

 

 

53,131

 

 
Calculation of non-GAAP income per share:
Non-GAAP net income

$

1,801

 

$

3,769

 

$

12,291

 

$

3,369

 

Non-GAAP diluted weighted-average number of common shares

 

57,361

 

 

55,587

 

 

57,390

 

 

53,131

 

Non-GAAP net income per share

$

0.03

 

$

0.07

 

$

0.21

 

$

0.06

 

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

$

(31,583

)

$

(26,720

)

$

(87,365

)

$

(99,799

)

Depreciation and amortization

 

14,082

 

 

12,929

 

 

40,580

 

 

38,975

 

Stock-based compensation

 

14,069

 

 

11,596

 

 

40,791

 

 

36,915

 

Provision for income taxes

 

596

 

 

116

 

 

909

 

 

621

 

Interest (income) expense, net

 

7,761

 

 

6,727

 

 

24,056

 

 

19,586

 

Acquisition related costs

 

581

 

 

1,062

 

 

2,841

 

 

714

 

Unoccupied lease charges

 

1,244

 

 

1,468

 

 

2,056

 

 

2,136

 

Loss on extinguishment of debt

 

-

 

 

-

 

 

1,513

 

 

-

 

Deferred revenue reduction from purchase accounting

 

554

 

 

957

 

 

1,677

 

 

3,720

 

Partnership termination charges

 

-

 

 

-

 

 

-

 

 

13,244

 

Adjusted EBITDA

$

7,304

 

$

8,135

 

$

27,058

 

$

16,112

 

 

Q2 Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Revenue Guidance

(in thousands)

 

Q4 2021 Guidance

Full Year 2021 Guidance

Low

High

Low

High

 
GAAP revenue

$

130,852

$

132,352

$

497,675

$

499,175

Deferred revenue reduction from purchase accounting

 

448

 

448

 

2,125

 

2,125

Non-GAAP revenue

$

131,300

$

132,800

$

499,800

$

501,300

 

 

MEDIA CONTACT:
Jean Kondo
Q2 Holdings, Inc.
M: +1-510-823-4728
jean.kondo@Q2.com

INVESTOR CONTACT:
Josh Yankovich
Q2 Holdings, Inc.
O: +1-512-682-4463
josh.yankovich@Q2.com

Source: Q2 Holdings, Inc.