Q2 Holdings (NYSE: QTWO) reported Q4 EPS of $0.38, $0.28 better than the analyst estimate of $0.10. Revenue for the quarter came in at $88.67 million versus the consensus estimate of $88.37 million.

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.”

“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.”

GUIDANCE:

Q2 Holdings sees Q1 2020 revenue of $92-94 million, versus the consensus of $93.03 million.

Q2 Holdings sees FY2020 revenue of $412-416 million, versus the consensus of $409.41 million.

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.

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