Delaware (State or Other Jurisdiction of Incorporation) | 001-36350 (Commission File Number) | 20-2706637 (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |||
99.1 | Press release dated May 3, 2017 | |||
Q2 HOLDINGS, INC. | |
May 3, 2017 | /s/ Jennifer N. Harris Jennifer N. Harris Chief Financial Officer |
Exhibit No. | Description | |||
99.1 | Press release dated May 3, 2017 | |||
• | Revenue for the first quarter of $44.5 million, up 32 percent year-over-year and up 6 percent sequentially. |
• | GAAP gross margin for the first quarter of 48.9 percent, up from 47.2 percent one year ago. Non-GAAP gross margin for the first quarter of 52.5 percent, up from 50.8 percent one year ago. |
• | GAAP net loss for the first quarter of $7.0 million, which compares to a GAAP net loss of $9.7 million for the first quarter of 2016. Adjusted EBITDA for the first quarter of positive $1.1 million, an improvement from negative $2.4 million one year ago. |
• | Hosted CONNECT, Q2’s annual client conference, in early April with record attendance from both client and prospect financial institutions. |
• | Delivered multiple Tier 1 customers into production on Q2’s corporate banking platform. |
• | Launched new Active-Active disaster recovery solution designed to noticeably mitigate downtime and deliver increased performance in the event of an outage. Reflective of Q2’s commitment of over $20 million over the last five years in data center hosting solutions. |
• | Exited the first quarter with approximately 8.9 million registered users on the Q2 Platform, representing 4 percent sequential and 32 percent year-over-year growth. |
• | Total revenue of $46.9 to $47.5 million, which would represent year-over-year growth of 30 percent to 32 percent. |
• | Adjusted EBITDA of positive $600 thousand to $1.0 million. GAAP net loss is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes depreciation and amortization, stock based compensation, acquisition-related costs, interest, and income taxes. 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. |
• | Total revenue of $192.3 to $194.3 million, which would represent year-over-year growth of 28 percent to 29 percent. |
• | Adjusted EBITDA of positive $6.5 million to $7.7 million. Adjusted EBITDA differs from GAAP net loss in that it excludes depreciation and amortization, stock based compensation, acquisition-related costs, interest, and income taxes. 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. |
Date: | May 4, 2017 | |
Time: | 8:30 a.m. EDT | |
Hosts: | Matt Flake, CEO / Jennifer Harris, CFO | |
Dial in: | US toll free: 1-877-201-0168 | |
International: 1-647-788-4901 | ||
Conference ID: | 8089225 |
March 31, 2017 | December 31, 2016 | |||||||
(unaudited) | (unaudited) | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 42,756 | $ | 54,873 | ||||
Restricted cash | 1,315 | 1,315 | ||||||
Investments | 39,409 | 42,249 | ||||||
Accounts receivable, net | 8,449 | 12,240 | ||||||
Prepaid expenses and other current assets | 6,017 | 3,215 | ||||||
Deferred solution and other costs, current portion | 8,422 | 8,839 | ||||||
Deferred implementation costs, current portion | 3,275 | 2,938 | ||||||
Total current assets | 109,643 | 125,669 | ||||||
Property and equipment, net | 31,701 | 27,480 | ||||||
Deferred solution and other costs, net of current portion | 12,853 | 11,125 | ||||||
Deferred implementation costs, net of current portion | 8,110 | 8,096 | ||||||
Intangible assets, net | 15,907 | 15,208 | ||||||
Goodwill | 12,876 | 12,876 | ||||||
Other long-term assets | 496 | 526 | ||||||
Total assets | $ | 191,586 | $ | 200,980 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 22,836 | $ | 29,088 | ||||
Deferred revenues, current portion | 28,781 | 30,123 | ||||||
Total current liabilities | 51,617 | 59,211 | ||||||
Deferred revenues, net of current portion | 29,935 | 31,707 | ||||||
Deferred rent, net of current portion | 9,181 | 9,466 | ||||||
Other long-term liabilities | 473 | 361 | ||||||
Total liabilities | 91,206 | 100,745 | ||||||
Stockholders' equity: | ||||||||
Common stock | 4 | 4 | ||||||
Treasury stock | (455 | ) | (417 | ) | ||||
Additional paid-in capital | 233,876 | 226,485 | ||||||
Accumulated other comprehensive loss | (55 | ) | (54 | ) | ||||
Accumulated deficit | (132,990 | ) | (125,783 | ) | ||||
Total stockholders' equity | 100,380 | 100,235 | ||||||
Total liabilities and stockholders' equity | $ | 191,586 | $ | 200,980 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
(unaudited) | (unaudited) | |||||||
Revenues | $ | 44,534 | $ | 33,759 | ||||
Cost of revenues (1) (2) | 22,772 | 17,814 | ||||||
Gross profit | 21,762 | 15,945 | ||||||
Operating expenses: | ||||||||
Sales and marketing (1) | 9,878 | 8,207 | ||||||
Research and development (1) | 9,651 | 7,903 | ||||||
General and administrative (1) | 8,452 | 7,421 | ||||||
Acquisition related costs | 348 | 1,482 | ||||||
Amortization of acquired intangibles | 371 | 368 | ||||||
Total operating expenses | 28,700 | 25,381 | ||||||
Loss from operations | (6,938 | ) | (9,436 | ) | ||||
Other income, net | 34 | 14 | ||||||
Loss before income taxes | (6,904 | ) | (9,422 | ) | ||||
Provision for income taxes | (136 | ) | (230 | ) | ||||
Net Loss | $ | (7,040 | ) | $ | (9,652 | ) | ||
Other comprehensive loss | ||||||||
Unrealized gain (loss) on available-for-sale investments | (1 | ) | 89 | |||||
Comprehensive loss | $ | (7,041 | ) | $ | (9,563 | ) | ||
Net loss per common share: | ||||||||
Net loss per common share, basic and diluted | $ | (0.17 | ) | $ | (0.25 | ) | ||
Weighted average common shares outstanding, basic and diluted | 40,630 | 39,024 |
(1) | Includes stock-based compensation expenses as follows: |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Cost of revenues | $ | 724 | $ | 406 | ||||
Sales and marketing | 631 | 435 | ||||||
Research and development | 945 | 632 | ||||||
General and administrative | 1,897 | 1,132 | ||||||
Total stock-based compensation expenses | $ | 4,197 | $ | 2,605 |
(2) | Includes amortization of acquired technology of $0.9 million and $0.8 million for the three months ended March 31, 2017 and 2016, respectively. |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
(unaudited) | (unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (7,040 | ) | $ | (9,652 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Amortization of deferred implementation, solution and other costs | 1,719 | 1,636 | ||||||
Depreciation and amortization | 3,525 | 2,927 | ||||||
Amortization of debt issuance costs | 24 | 24 | ||||||
Amortization of premiums on investments | 69 | 102 | ||||||
Stock-based compensation expenses | 4,197 | 2,605 | ||||||
Deferred income taxes | 117 | 70 | ||||||
Other non-cash charges | (6 | ) | 24 | |||||
Changes in operating assets and liabilities | (13,273 | ) | 2,451 | |||||
Cash provided by (used in) operating activities | (10,668 | ) | 187 | |||||
Cash flows from investing activities: | ||||||||
Net redemptions (purchases) of investments | 2,770 | (6,183 | ) | |||||
Purchases of property and equipment | (5,361 | ) | (3,590 | ) | ||||
Business combinations and asset acquisitions, net of cash acquired | (1,316 | ) | (95 | ) | ||||
Capitalization of software development costs | (532 | ) | (563 | ) | ||||
Purchases of intangible assets | — | (75 | ) | |||||
Cash used in investing activities | (4,439 | ) | (10,506 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on financing obligations and capital leases, net | — | (2,187 | ) | |||||
Proceeds from issuance of common stock | 2,990 | 716 | ||||||
Net cash provided by (used in) financing activities | 2,990 | (1,471 | ) | |||||
Net decrease in cash and cash equivalents | (12,117 | ) | (11,790 | ) | ||||
Cash and cash equivalents, beginning of period | 54,873 | 67,049 | ||||||
Cash and cash equivalents, end of period | $ | 42,756 | $ | 55,259 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
(unaudited) | (unaudited) | |||||||
GAAP gross profit | $ | 21,762 | $ | 15,945 | ||||
Stock-based compensation | 724 | 406 | ||||||
Amortization of acquired technology | 886 | 798 | ||||||
Non-GAAP gross profit | $ | 23,372 | $ | 17,149 | ||||
Non-GAAP gross margin: | ||||||||
Non-GAAP gross profit | $ | 23,372 | $ | 17,149 | ||||
GAAP revenue | 44,534 | 33,759 | ||||||
Non-GAAP gross margin | 52.5 | % | 50.8 | % | ||||
GAAP sales and marketing expense | $ | 9,878 | $ | 8,207 | ||||
Stock-based compensation | (631 | ) | (435 | ) | ||||
Non-GAAP sales and marketing expense | $ | 9,247 | $ | 7,772 | ||||
GAAP research and development expense | $ | 9,651 | $ | 7,903 | ||||
Stock-based compensation | (945 | ) | (632 | ) | ||||
Non-GAAP research and development expense | $ | 8,706 | $ | 7,271 | ||||
GAAP general and administrative expense | $ | 8,452 | $ | 7,421 | ||||
Stock-based compensation | (1,897 | ) | (1,132 | ) | ||||
Non-GAAP general and administrative expense | $ | 6,555 | $ | 6,289 | ||||
GAAP operating loss | $ | (6,938 | ) | $ | (9,436 | ) | ||
Stock-based compensation | 4,197 | 2,605 | ||||||
Acquisition related costs | 348 | 1,482 | ||||||
Amortization of acquired technology | 886 | 798 | ||||||
Amortization of acquired intangibles | 371 | 368 | ||||||
Non-GAAP operating loss | $ | (1,136 | ) | $ | (4,183 | ) | ||
GAAP net loss | $ | (7,040 | ) | $ | (9,652 | ) | ||
Stock-based compensation | 4,197 | 2,605 | ||||||
Acquisition related costs | 348 | 1,482 | ||||||
Amortization of acquired technology | 886 | 798 | ||||||
Amortization of acquired intangibles | 371 | 368 | ||||||
Non-GAAP net loss | $ | (1,238 | ) | $ | (4,399 | ) | ||
Reconciliation of GAAP net loss to adjusted EBITDA: | ||||||||
GAAP net loss | $ | (7,040 | ) | $ | (9,652 | ) | ||
Depreciation and amortization | 3,525 | 2,927 | ||||||
Stock-based compensation | 4,197 | 2,605 | ||||||
Provision for income taxes | 136 | 230 | ||||||
Interest income, net | (34 | ) | (14 | ) | ||||
Acquisition related costs | 348 | 1,482 | ||||||
Adjusted EBITDA | $ | 1,132 | $ | (2,422 | ) |
MEDIA CONTACT: | INVESTOR CONTACT: | |||
Emma Chase | Bob Gujavarty | |||
Red Fan Communications | Q2 Holdings, Inc. | |||
O: (512) 551-9253 / C: (512) 917-4319 | O: (512) 439-3447 | |||
emma@redfancommunications.com | bobby.gujavarty@q2ebanking.com |