QTWO Earnings Prediction
The chart below shows how QTWO performed 10 days before and after its earnings report, based on data from the past quarters. Typically, QTWO sees a +0.48% change in stock price 10 days leading up to the earnings, and a +7.17% change 10 days following the report. On the earnings day itself, the stock moves by -0.36%. This data can give you a slight idea of what to expect for the next quarter's release.
QTWO Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
172.89M
11.88%
4.46%
Gross Margin
47.45%
6.92%
1.43%
Operating Margin
-7.37%
-46.63%
-6.59%
Net Margin
-7.55%
-50.62%
-9.69%
EPS
-0.22
-46.34%
-4.35%
No Data Available
QTWO Earnings Analysis
Q2 Holdings Inc Corporation (QTWO.N) Earnings Conference Call
Positive
Non-GAAP Revenue Increase: Non-GAAP revenue reached $175 million, reflecting a 13% year-over-year increase, surpassing the high end of guidance.
Subscription Revenue Growth: Subscription revenue grew by 18% year-over-year, accounting for over 80% of total revenue, indicating a successful strategic shift towards higher-margin recurring revenue streams.
Annual Recurring Revenue Growth: Total annualized recurring revenue (ARR) increased to $796 million, up 15% year-over-year, driven by new customer wins and expansion bookings with existing customers.
EBITDA Growth Surge: Adjusted EBITDA for the quarter was $32.6 million, a 66% increase from the prior year, demonstrating significant improvement in profitability.
Free Cash Flow Increase: Free cash flow for the quarter was $35 million, contributing to a year-to-date total of $70 million, which is a substantial increase from $10 million in the same period last year.
Negative
Subscription Revenue Moderation: Subscription revenue growth is expected to moderate to 12%-14% year-over-year in Q4 2024, down from 16% in Q3 2024, indicating potential challenges in maintaining growth momentum.
Revenue Decline Analysis: Services and other revenues declined by 11% year-over-year, primarily due to a reduction in professional service revenues, which are discretionary and expected to persist into the foreseeable future.
Services Segment Decline: The company anticipates continued headwinds in its Services segment, with an average year-over-year decline of roughly 12% in 2024, reflecting a strategic focus on higher-margin growth opportunities.
Backlog Conversion Challenges: Despite a strong backlog of over $2 billion, the company faces challenges in converting this into revenue due to the discretionary nature of some services, which are under 50% of the total services revenue.
Declining Professional Services Revenue: The company has seen a persistent pattern of declining professional services revenue, which has negatively impacted total annualized recurring revenue (ARR) growth, despite overall ARR increasing by 15% year-over-year.
QTWO FAQs
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QTWO Earning Call Sentiment
Q2 Holdings, Inc. (QTWO) Q3 2024 Earnings Call Transcript
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QTWO.N
-2.82%Positive
The earnings call indicates strong financial performance with a 13% revenue increase and improved EBITDA. Subscription revenue growth exceeded projections, and cash flow generation improved significantly. The Q&A revealed optimism about future demand and backlog management, with no major concerns raised. Despite some uncertainty in management's responses, the overall sentiment is positive, supported by record backlog and strong subscription ARR growth. Given the market cap, the stock is likely to react positively, possibly within the 2% to 8% range.
