On July 31, 2024, Q2 Holdings Inc (QTWO, Financial) released its 8-K filing for the second quarter of 2024. Q2 Holdings Inc. is a provider of cloud-based virtual banking solutions for regional financial institutions to deliver mobile banking services to retail and commercial end-users who wish to bank anywhere and anytime. Its solutions operate on an integrated tablet-first platform which provides financial institutions a comprehensive view of account holder activity and meets the regulatory and security requirements applicable to the industry. The firm generates revenue from subscription-based arrangements for software offerings. A large majority of the firm's revenue is generated in the United States.
Performance Overview
Q2 Holdings Inc (QTWO, Financial) reported revenue of $172.9 million for the second quarter of 2024, surpassing the analyst estimate of $170.93 million. This represents a 12% year-over-year increase and a 4% rise from the first quarter of 2024. The company also reported a GAAP net loss of $13.1 million, a significant improvement from the $23.6 million loss in the same quarter last year and a slight improvement from the $13.8 million loss in the first quarter of 2024.
Key Financial Achievements
Q2 Holdings Inc (QTWO, Financial) achieved a GAAP gross margin of 50.2% for the second quarter, up from 47.8% in the prior-year quarter and 49.7% in the first quarter of 2024. On a non-GAAP basis, the gross margin was 55.7%, up from 54.2% in the prior-year quarter and 54.9% from the first quarter of 2024. Adjusted EBITDA for the second quarter was $29.9 million, a substantial increase from $17.6 million in the prior-year quarter and $25.2 million from the first quarter of 2024.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $172.9 million | $154.5 million |
| GAAP Gross Margin | 50.2% | 47.8% |
| GAAP Net Loss | $13.1 million | $23.6 million |
| Adjusted EBITDA | $29.9 million | $17.6 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Q2 Holdings Inc (QTWO, Financial) reported cash and cash equivalents of $303.8 million, up from $229.7 million at the end of 2023. The company also reported total assets of $1.25 billion, compared to $1.20 billion at the end of 2023. Net cash provided by operating activities for the first half of 2024 was $49.5 million, a significant increase from $17.0 million in the same period last year.
Sales and Strategic Initiatives
Q2 Holdings Inc (QTWO, Financial) signed four Tier 1 digital banking contracts, including two new banks and two expansion agreements with existing customers. The company also signed one Enterprise and one Tier 1 relationship pricing contract. Subscription Annualized Recurring Revenue increased to $633.9 million, up 19% year-over-year from $533.2 million at the end of the second quarter of 2023.
“We closed out the first half of the year with solid sales execution and financial results,” said Q2 Chairman and CEO Matt Flake. “We’ve had broad sales success for several consecutive quarters, highlighted by a mix of net new and expansion wins across our lines of business.”
Outlook
Following the strong results, Q2 Holdings Inc (QTWO, Financial) has raised its full-year outlook for revenue and adjusted EBITDA. The company now expects total non-GAAP revenue for the full year 2024 to be between $688.5 million and $692.5 million, representing year-over-year growth of 10-11%. Adjusted EBITDA is expected to be between $116.5 million and $119.5 million, representing 17% of non-GAAP revenue for the year.
For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Q2 Holdings Inc for further details.
