Yahoo Finance

• Non-GAAP Revenue (Q4 2024): $183 million, up 13% year over year and 5% sequentially.

• Full-Year Non-GAAP Revenue (2024): $696.5 million, up 11% from the prior year.

• Adjusted EBITDA (Q4 2024): $37.6 million, representing 20.6% of non-GAAP revenue.

• Full-Year Adjusted EBITDA (2024): $125.3 million, up 63% from the prior year.

• Gross Margin (Q4 2024): 57.4%, up from 56% in the prior year period.

• Total ARR (End of 2024): $824 million, up 12% year over year.

• Subscription ARR (End of 2024): $682 million, up 15% year over year.

• Revenue Churn (2024): 4.4%, improving from 6.1% in 2023.

• Free Cash Flow (2024): $107 million, with an 85% conversion rate as a percentage of adjusted EBITDA.

• Cash, Cash Equivalents, and Investments (End of Q4 2024): $447 million.

• Employee Count (End of 2024): 2,483, up from 2,315 at the end of 2023.

• First Quarter 2025 Revenue Guidance: $184 million to $188 million.

• Full-Year 2025 Revenue Guidance: $772 million to $779 million, representing 11% to 12% growth.

• First Quarter 2025 Adjusted EBITDA Guidance: $36 million to $39 million.

• Full-Year 2025 Adjusted EBITDA Guidance: $165 million to $170 million, representing 21% to 22% of revenue.

• Warning! GuruFocus has detected 4 Warning Signs with BOM:500400.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Q2 Holdings Inc (NYSE:QTWO) delivered non-GAAP revenue of $183 million in the fourth quarter, up 13% year over year and 5% sequentially, exceeding the high end of their guidance.

• The company achieved a record-breaking year for renewals, with bookings from renewals up 80% year over year, indicating strong customer satisfaction and platform value.

• Q2 Holdings Inc (NYSE:QTWO) reported a significant increase in adjusted EBITDA, reaching $37.6 million, up 62% from the prior year period, demonstrating improved profitability.

• The Innovation Studio was a key differentiator, contributing to more than 90% of wins in 2024, with bookings more than doubling year over year.

• The company ended the year with a strong cash position, with cash, cash equivalents, and investments totaling $447 million, up from $408 million in the previous quarter.

Negative Points

• Professional services revenue declined by 11% year over year, reflecting a decrease in discretionary spending by customers.

• Despite strong performance, Q2 Holdings Inc (NYSE:QTWO) faces competitive pressures, particularly in the retail segment, affecting pricing dynamics.

• The company anticipates continued pressure on total ARR growth relative to subscription ARR growth due to the decline in professional services-based revenue.

• Q2 Holdings Inc (NYSE:QTWO) acknowledges the challenges in executing large enterprise deals, which require significant effort and resources.

• The company faces ongoing challenges in cross-selling commercial digital banking solutions to existing customers, with 60% of their digital banking customers using only one of their solutions.