Company Quick10K Filing
Q2 Holdings
Price78.85 EPS-1
Shares48 P/E-57
MCap3,793 P/FCF-2,857
Net Debt-603 EBIT-71
TEV3,190 TEV/EBIT-45
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-21
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-08
10-K 2018-12-31 Filed 2019-02-19
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-16
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-02-21
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-02-12
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-02-12
10-Q 2014-09-30 Filed 2014-11-10
10-Q 2014-06-30 Filed 2014-08-12
10-Q 2014-03-31 Filed 2014-05-14
8-K 2020-08-03 Earnings, Officers, Exhibits
8-K 2020-07-15 Officers, Exhibits
8-K 2020-06-22
8-K 2020-06-09
8-K 2020-05-11
8-K 2020-05-06
8-K 2020-03-20
8-K 2020-02-19
8-K 2019-12-18
8-K 2019-11-06
8-K 2019-10-31
8-K 2019-09-30
8-K 2019-08-07
8-K 2019-07-15
8-K 2019-06-11
8-K 2019-06-06
8-K 2019-06-05
8-K 2019-05-07
8-K 2019-03-06
8-K 2019-02-13
8-K 2018-12-06
8-K 2018-11-06
8-K 2018-10-15
8-K 2018-08-07
8-K 2018-08-06
8-K 2018-06-13
8-K 2018-05-02
8-K 2018-03-08
8-K 2018-02-22
8-K 2018-02-21
8-K 2018-02-20
8-K 2018-02-14

QTWO 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 a200630q2exhibit311.htm
EX-31.2 a200630q2exhibit312.htm
EX-32.1 a200630q2exhibit321.htm
EX-32.2 a200630q2exhibit322.htm

Q2 Holdings Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1.00.80.60.40.20.02014201620182020
Assets, Equity
0.10.10.0-0.0-0.1-0.12014201620182020
Rev, G Profit, Net Income
0.50.40.30.10.0-0.12014201620182020
Ops, Inv, Fin

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020   
 or
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________

Commission File Number 001-36350
Q2 Holdings, Inc.
Exact Name of Registrant as Specified in its Charter
Delaware20-2706637
State or Other Jurisdiction of
Incorporation or Organization
I.R.S. Employer Identification No.
13785 Research Blvd.,Suite 150
Austin,
Texas78750
Address of Principal Executive OfficesZip Code
(512275-0072
Registrant's Telephone Number, Including Area Code
Not Applicable
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueQTWONew York Stock Exchange

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No 
        Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No 
        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes    No 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 53,481,397 shares of Common Stock, $0.0001 par value per share as of July 31, 2020.



Table of Contents
TABLE OF CONTENTS
 
 PAGE
 
   
Item 1.
 3
   
Item 2.
 
Item 3.
 
Item 4.
  
Item 1.
  
Item 1A.
  
Item 2.
  
Item 3.
  
Item 4.
  
Item 5.
  
Item 6.
 
 

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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.

Q2 HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 June 30, 2020December 31, 2019
(unaudited)
Assets  
Current assets:  
Cash and cash equivalents$376,257  $100,094  
Restricted cash3,464  3,468  
Investments12,687  32,325  
Accounts receivable, net33,585  22,442  
Contract assets, current portion, net1,049  872  
Prepaid expenses and other current assets8,862  6,354  
Deferred solution and other costs, current portion18,815  15,609  
Deferred implementation costs, current portion9,820  5,171  
Total current assets464,539  186,335  
Property and equipment, net50,298  39,252  
Right of use assets33,282  35,388  
Deferred solution and other costs, net of current portion31,328  29,220  
Deferred implementation costs, net of current portion15,686  15,848  
Intangible assets, net203,986  223,861  
Goodwill462,274  462,023  
Contract assets, net of current portion and allowance18,028  15,189  
Other long-term assets2,158  2,318  
Total assets$1,281,579  $1,009,434  
Liabilities and stockholders' equity  
Current liabilities:  
Accounts payable$7,028  $10,967  
Accrued liabilities15,586  16,341  
Accrued compensation20,246  38,668  
Deferred revenues, current portion68,172  57,850  
Lease liabilities, current portion8,812  9,140  
Total current liabilities119,844  132,966  
Convertible notes, net of current portion435,880  424,784  
Deferred revenues, net of current portion33,089  32,954  
Lease liabilities, net of current portion33,707  36,079  
Other long-term liabilities11,567  3,239  
Total liabilities634,087  630,022  
Commitments and contingencies (Note 7)
Stockholders' equity: 
Preferred stock: $0.0001 par value; 5,000 shares authorized; no shares issued or outstanding as of June 30, 2020 and December 31, 2019
    
Common stock: $0.0001 par value; 150,000 shares authorized; 53,433 issued and outstanding as of June 30, 2020 and 48,386 shares issued and outstanding as of December 31, 2019
5  5  
Additional paid-in capital964,185  622,692  
Accumulated other comprehensive income/(loss)(52) 14  
Accumulated deficit(316,646) (243,299) 
Total stockholders' equity647,492  379,412  
Total liabilities and stockholders' equity$1,281,579  $1,009,434  
   
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Table of Contents
Q2 HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)
(in thousands, except per share data)
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenues$97,581  $77,646  $189,961  $148,942  
Cost of revenues(1)
53,203  40,052  106,310  77,236  
Gross profit44,378  37,594  83,651  71,706  
Operating expenses:   
Sales and marketing(1)
16,310  15,866  36,194  31,671  
Research and development(1)
23,642  19,118  48,600  36,775  
General and administrative(1)
17,203  14,079  36,313  27,939  
Acquisition related costs1,127  1,977  (840) 4,695  
Amortization of acquired intangibles4,491  905  8,982  2,120  
Partnership termination charges13,244    13,244    
Unoccupied lease charges668    668    
Total operating expenses76,685  51,945  143,161  103,200  
Loss from operations(32,307) (14,351) (59,510) (31,494) 
Other income (expense):   
Interest and other income265  856  721  1,663  
Interest and other expense(6,864) (4,073) (13,785) (7,087) 
Total other income (expense), net(6,599) (3,217) (13,064) (5,424) 
Loss before income taxes(38,906) (17,568) (72,574) (36,918) 
Benefit from (provision for) income taxes(65) 237  (505) 276  
Net loss$(38,971) $(17,331) $(73,079) $(36,642) 
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale investments108  97  (14) 210  
Foreign currency translation adjustment3  (22) (52) (10) 
Comprehensive loss$(38,860) $(17,256) $(73,145) $(36,442) 
Net loss per common share, basic and diluted$(0.76) $(0.39) $(1.46) $(0.83) 
Weighted average common shares outstanding:   
Basic and diluted51,241  44,978  49,911  44,382  
_______________________________________________________________________________

(1)Includes stock-based compensation expense as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Cost of revenues$1,904  $1,428  $5,312  $2,976  
Sales and marketing1,390  1,596  4,144  3,402  
Research and development3,109  2,473  6,879  4,485  
General and administrative4,380  4,072  8,984  7,602  
Total stock-based compensation expense$10,783  $9,569  $25,319  $18,465  
  
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Table of Contents
Q2 HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(unaudited)
(in thousands)
 Common StockAdditional
Paid-In
Capital
Accumulated Other Comprehensive Income/(Loss)Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 201843,535  $4  $331,355  $(37) $(172,422) $158,900  
Stock-based compensation expense—  —  9,154  —  —  9,154  
Exercise of stock options272  —  3,741  —  —  3,741  
Shares acquired to settle the exercise of stock options(3) —  (217) —  —  (217) 
Shares issued for the vesting of restricted stock awards312  —  —  —  —    
Other comprehensive income—  —  —  126  —  126  
Net loss—  —  —  —  (19,311) (19,311) 
Balance at March 31, 201944,116  $4  $344,033  $89  $(191,733) $152,393  
Stock-based compensation expense—  —  9,886  —  —  9,886  
Exercise of stock options360  —  5,147  —  —  5,147  
Shares acquired to settle the exercise of stock options(3) —  (250) —  —  (250) 
Shares issued for the vesting of restricted stock awards63  —  —  —  —    
Proceeds from issuance of common stock, net of issuance costs3,034  1  195,186  —  —  195,187  
Equity component of convertible senior notes, less issuance costs—  —  81,520  —  —  81,520  
Purchase of capped call transactions—  —  (40,765) —  —  (40,765) 
Other comprehensive income—  —  —  75  —  75  
Net loss—  —  —  —  (17,331) (17,331) 
Balance at June 30, 201947,570  $5  $594,757  $164  $(209,064) $385,862  

 Common StockAdditional
Paid-In
Capital
Accumulated Other Comprehensive Income/(Loss)Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 201948,386  $5  $622,692  $14  $(243,299) $379,412  
Stock-based compensation expense—  —  14,866  —  —  14,866  
Exercise of stock options136  —  1,449  —  —  1,449  
Shares acquired to settle the exercise of stock options(3) —  (264) —  —  (264) 
Shares issued for the vesting of restricted stock awards444  —  —  —  —    
Cumulative effect of the adoption of new accounting standard—  —  —  —  (268) (268) 
Other comprehensive loss—  —  —  (177) —  (177) 
Net loss—  —  —  —  (34,108) (34,108) 
Balance at March 31, 202048,963  $5  $638,743  $(163) $(277,675) $360,910  
Stock-based compensation expense—  —  11,199  —  —  11,199  
Exercise of stock options156  —  3,359  —  —  3,359  
Shares acquired to settle the exercise of stock options(4) —  (333) —  —  (333) 
Shares issued for the vesting of restricted stock awards83  —  —  —  —    
Proceeds from issuance of common stock, net of issuance costs4,235  —  311,217  —  —  311,217  
Other comprehensive income—  —  —  111  —  111  
Net loss—  —  —  —  (38,971) (38,971) 
Balance at June 30, 202053,433  $5  $964,185  $(52) $(316,646) $647,492  
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


Table of Contents
Q2 HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
 Six Months Ended June 30,
 20202019
Cash flows from operating activities:  
Net loss$(73,079) $(36,642) 
Adjustments to reconcile net loss to net cash from operating activities:
Amortization of deferred implementation, solution and other costs8,608  6,056  
Depreciation and amortization26,046  11,796  
Amortization of debt issuance costs945  545  
Amortization of debt discount10,177  5,230  
Amortization of premiums on investments83  183  
Stock-based compensation expense26,065  19,040  
Realized gain on sale of marketable securities(14)   
Deferred income taxes311  (347) 
Allowance for credit losses292    
Allowance for sales credits(9) 114  
Loss on disposal of long-lived assets3  (226) 
Unoccupied lease charges668    
Changes in operating assets and liabilities:
Accounts receivable, net(11,693) (7,037) 
Prepaid expenses and other current assets(2,516) (1,543) 
Deferred solution and other costs(9,383) (10,864) 
Deferred implementation costs(9,028) (6,537) 
Contract assets, net(3,015) (3,178) 
Other long-term assets1,896  2,120  
Accounts payable(3,471) (189) 
Accrued liabilities(6,228) (70) 
Deferred revenues10,458  5,746  
Deferred rent and other long-term liabilities5,670  (2,876) 
Net cash used in operating activities(27,214) (18,679) 
Cash flows from investing activities:  
Purchases of investments  (24,778) 
Maturities of investments19,556  58,974  
Purchases of property and equipment(14,775) (10,864) 
Capitalized software development costs(398)   
Purchases of intangible assets  (288) 
Net cash provided by investing activities4,383  23,044  
Cash flows from financing activities:  
Proceeds from issuance of common stock, net of issuance costs311,636  195,581  
Proceeds from issuance of convertible notes, net of issuance costs  307,288  
Purchases of capped call transactions  (40,765) 
Proceeds from exercise of stock options to purchase common stock4,216  8,422  
Payment of contingent consideration(16,862)