Q2 Holdings, Inc.

QTWO

Services-Prepackaged Software

Mkt Cap

$3.706B

PE

-47.08

Debt

$491M

Cash

$278.8M

EV

$3.918B

FCF

$73.79M

Market Cap

$3.706B

P/E Ratio

-47.08

Debt

$491M

Cash

$278.8M

EV

$3.918B

FCF

$73.79M

Charts data: {"Earnings":[{"time":"2014-12-30","value":-19634000},{"time":"2015-12-30","value":-25063000},{"time":"2016-12-30","value":-36354000},{"time":"2017-12-30","value":-26164000},{"time":"2018-12-30","value":-35397000},{"time":"2019-12-30","value":-70877000},{"time":"2020-12-30","value":-137620000},{"time":"2021-12-30","value":-112746000},{"time":"2022-12-30","value":-108983000},{"time":"2023-12-30","value":-65384000}],"Sales":[{"time":"2014-12-30","value":79129000},{"time":"2015-12-30","value":108867000},{"time":"2016-12-30","value":150224000},{"time":"2017-12-30","value":193978000},{"time":"2018-12-30","value":241100000},{"time":"2019-12-30","value":315484000},{"time":"2020-12-30","value":402751000},{"time":"2021-12-30","value":498720000},{"time":"2022-12-30","value":565673000},{"time":"2023-12-30","value":624624000}],"Net Margins":[{"time":"2014-12-30","value":-0.24812647701853935},{"time":"2015-12-30","value":-0.23021668641553455},{"time":"2016-12-30","value":-0.24199861540100118},{"time":"2017-12-30","value":-0.13488127519615625},{"time":"2018-12-30","value":-0.1468145997511406},{"time":"2019-12-30","value":-0.22466115555780958},{"time":"2020-12-30","value":-0.3416999585351743},{"time":"2021-12-30","value":-0.22607074109720884},{"time":"2022-12-30","value":-0.19266077751633895},{"time":"2023-12-30","value":-0.10467737390814313}],"Assets":[{"time":"2014-12-30","value":136806000},{"time":"2015-12-30","value":204468000},{"time":"2016-12-30","value":200980000},{"time":"2017-12-30","value":212815000},{"time":"2018-12-30","value":463720000},{"time":"2019-12-30","value":1009434000},{"time":"2020-12-30","value":1416702000},{"time":"2021-12-30","value":1385045000},{"time":"2022-12-30","value":1349726000},{"time":"2023-12-30","value":1201425000}],"Stockholders Equity":[{"time":"2014-12-30","value":78940000},{"time":"2015-12-30","value":117974000},{"time":"2016-12-30","value":100235000},{"time":"2017-12-30","value":106622000},{"time":"2018-12-30","value":158900000},{"time":"2019-12-30","value":379412000},{"time":"2020-12-30","value":643364000},{"time":"2021-12-30","value":570296000},{"time":"2022-12-30","value":419024000},{"time":"2023-12-30","value":448479000}],"ROE":[{"time":"2014-12-30","value":-0.24872054725107676},{"time":"2015-12-30","value":-0.21244511502534458},{"time":"2016-12-30","value":-0.3626876839427346},{"time":"2017-12-30","value":-0.24539025717019003},{"time":"2018-12-30","value":-0.22276274386406544},{"time":"2019-12-30","value":-0.18680748104962416},{"time":"2020-12-30","value":-0.21390690184716585},{"time":"2021-12-30","value":-0.19769733612019022},{"time":"2022-12-30","value":-0.26008772767192334},{"time":"2023-12-30","value":-0.14579054983622422}],"ROA":[{"time":"2014-12-30","value":-0.13940178062365685},{"time":"2015-12-30","value":-0.12148600269968896},{"time":"2016-12-30","value":-0.17771917603741666},{"time":"2017-12-30","value":-0.12441792166905528},{"time":"2018-12-30","value":-0.06868368843267489},{"time":"2019-12-30","value":-0.06612220313561858},{"time":"2020-12-30","value":-0.07046859537150367},{"time":"2021-12-30","value":-0.05631224978249804},{"time":"2022-12-30","value":-0.07761649401434069},{"time":"2023-12-30","value":-0.05145722787523149}]}

Q2 Holdings, Inc. provides cloud-based digital solutions to regional and community financial institutions in the United States. The company offers Digital Banking Platform, an end-to-end digital banking platform supports its financial institution customers in their delivery of unified digital banking services across digital channels. Its digital banking platform solutions, comprising Q2 Consumer Banking, Q2 Small Business and Commercial, Q2mobile Remote Deposit Capture, Q2 Sentinel, Q2 Patrol, Q2 SMART, Q2 Contextual Personal Financial Management, Q2 Goals, Q2 CardSwap, Q2 Gro, Q2 Innovation Studio, Q2 Biller Direct, ClickSWITCH, Sensibill, Centrix Dispute Tracking System, Centrix Payments I.Q. System, and Centrix Exact/Transaction Management System to monitor and optimize end-user acquisition, engagement and retention, customize and extend the platform, and enhance operational efficiencies. The company also provides lending solutions, which consists precisionlender solutions, a cloud-based platform, data-driven sales enablement, relationship pricing, and portfolio management solution includes precisionlender platform, treasury pricing, data studio, and Andi; and Q2 Cloud Lending solutions, a cloud-based digital lending platform and end-to-end lending solution that allows financial institutions, FinTechs, and Alt-FIs to automate and digitize their lending activities, supporting digital lending applications, scoring, underwriting, servicing, and collections for multiple assets classes comprising Q2 CL portal, originate, loan, marketplace, and collections. In addition, it offers Q2 Innovation Studio, an application program interface, or API, based and software development kit, or SDK, based open technology platform; and Helix, a cloud-based, real-time core processing BaaS platform. The company was formerly known as CBG Holdings, Inc. and changed its name to Q2 Holdings, Inc. in March 2013. Q2 Holdings, Inc. was founded in 2004 and is headquartered in Austin, Texas.

Sector

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DCF

Discounted Cash Flow Valuation of Q2 Holdings, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$73.79M	$95.92M	$122M	$151.9M	$184.8M	$219.7M	$255.1M	$289.1M	$319.6M	$344.4M	$361.7M	$3.617B
DCF		$83.41M	$92.28M	$99.86M	$105.6M	$109.2M	$110.3M	$108.7M	$104.5M	$97.91M	$89.4M	$894M
Value	$1.895B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth -

Earnings Stability -

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-23%	-24%	-13%	-15%	-22%	-34%	-23%	-19%	-10%	-12%
ROA	-12%	-18%	-12%	-6.9%	-6.6%	-7%	-5.6%	-7.8%	-5.1%	-6%
ROE	-21%	-36%	-25%	-22%	-19%	-21%	-20%	-26%	-15%	-17%

What is the average Net Margin?

The average Net Margin over the past 5 years is -20.61%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +1.21%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is -6.51%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.19%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is -20.45%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +0.52%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

Data are missing

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	-	0.00	-21.03	-31.96	-20.95	49.38	26.31	7.59	6.65
Debt Equity	-	-	0.00	1.15	1.12	0.87	0.97	1.60	1.09	1.06
MIN
Graham Stability	-	-	-	-	-	-	-	-	-	-

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 6.65.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 11.09.

What is the Graham’s Stability?

Graham’s Stability measure stands at -.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Data are missing

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	23%	21%	16%	10%	-3.2%
Net Income	-	-	-	-	-
Stockholders Equity	24%	23%	-11%	7%	-3.7%
FCF	-	-	-	150%	27%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +20.97%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -3.16%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +13.06%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +23.06%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -3.65%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +26.77%.