Q2 Holdings (QTWO) Tops Q1 EPS by 7c, Beats on Revenues; Offers FY18 Guidance

Q2 Holdings (NYSE: QTWO) reported Q1 EPS of $0.04, $0.07 better than the analyst estimate of ($0.03). Revenue for the quarter came in at $54.8 million versus the consensus estimate of $53.01 million.

First Quarter 2018 Results

Please note these results reflect the impact from the adoption of ASC 606, Contracts with Customers, effective Jan. 1, 2018.

• Revenue for the first quarter of $54.8 million, up 23 percent year-over-year and up 6 percent from the previous quarter.
• GAAP gross margin for the first quarter of 50.8 percent, up from 48.9 percent one year ago. Non-GAAP gross margin for the first quarter of 54.3 percent, up from 52.5 percent one year ago.
• GAAP net loss for the first quarter of $6.0 million, which compares to a GAAP net loss of $7.0 million for the first quarter of 2017, and $5.5 million for the fourth quarter of 2017. Adjusted EBITDA for the first quarter of positive $5.0 million, an improvement from positive $1.1 million one year ago and positive $4.1 million for the fourth quarter of 2017.

Financial Outlook

Q2 Holdings is providing guidance for its second quarter 2018 as follows:

• Total revenue of $57.9 million to $58.5 million, which would represent year-over-year growth of 22 percent to 23 percent.
• Adjusted EBITDA of $4.7 million to $5.3 million. GAAP net loss is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes things such as depreciation and amortization, stock-based compensation, acquisition-related costs, interest, income taxes and unoccupied lease charges. 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.

Q2 Holdings is providing guidance for the full-year 2018 as follows:

• Total revenue of $236.5 million to $238.5 million, which would represent year-over-year growth of 22 percent to 23 percent.
• Adjusted EBITDA of $21 million to $23 million. Adjusted EBITDA differs from GAAP net loss in that it excludes things such as depreciation and amortization, stock-based compensation, acquisition-related costs, interest, income taxes and unoccupied lease charges. 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.

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

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