Q2 Holdings (NYSE: QTWO) reported Q1 EPS of ($0.05), $0.01 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $71.3 million versus the consensus estimate of $70.58 million.

First Quarter 2019 Results

• Revenue for the first quarter of $71.3 million, up 30 percent year-over-year and up 6 percent from the previous quarter.
• GAAP gross margin for the first quarter of 47.8 percent, down from 50.8 percent one year ago. Non-GAAP gross margin for the first quarter of 52.3 percent, down from 54.3 percent one year ago. The year-over-year decline is primarily attributable to the investment in the Cloud Lending and Gro acquisitions closed in the fourth quarter of 2018.
• GAAP net loss for the first quarter of $19.3 million, which compares to $6.0 million for the first quarter of 2018, and $11.9 million for the fourth quarter of 2018. Adjusted EBITDA for the first quarter of $0.3 million, down from $5.0 million one year ago and down from $3.1 million for the fourth quarter of 2018 primarily as a result of the investment in the Cloud Lending and Gro acquisitions and the timing and volume of payroll taxes related to equity awards.

“We had a strong start to the year in the first quarter, particularly on the sales side of the business,” said Matt Flake, CEO of Q2. “We achieved record bookings for a first quarter, powered by a broad mix of deals that included our newly acquired Gro and Cloud Lending products in multiple combinations. We also continued our sales execution on the digital banking side, with a balanced performance across bank and credit union markets. With our current pipeline and newly expanded product portfolio, I’m as optimistic as ever about the opportunity ahead of us through 2019 and beyond.”

GUIDANCE:

Q2 Holdings sees Q2 2019 revenue of $75.5-76.5 million, versus the consensus of $74.7 million.

Q2 Holdings sees FY2019 revenue of $308.8-311.8 million, versus the consensus of $307.74 million.

“We are pleased to have delivered first quarter revenue which exceeded the high end of our guidance,” said Jennifer Harris, CFO of Q2. “Given our strong bookings performance, we have accelerated the investment in the continued integration of our newly acquired businesses in order to capitalize on the opportunity they represent. This accelerated investment, along with the timing of payroll taxes and our annual client conference in the second quarter, will result in margins being relatively muted in the first half of the year with approximately 80 percent of the adjusted EBITDA coming in the back half of the year.”

For earnings history and earnings-related data on Q2 Holdings (QTWO) click here.