Q2 Holdings, Inc.

Technology
Computer Software: Prepackaged Software
www.q2ebanking.com

Moat Score
Safety Score

Market Cap $5.28B
PE -137
Debt $492.45M
Cash $360.79M
EV $5.41B
FCF $129.06M

Earnings

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Sales & Net Margins

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Earnings	-$38.54M
EBIT	-$30.86M
ROE	-7%
ROA	-2%
FCF	$129.06M
Equity	$517.80M
Growth Stability	1
PE	-137.02
PB	10.2
P/FCF	40.91
P/S	7.58
Price/Cash	0.07
Debt/Equity	0.95
Debt/FCF	3.82
Net Margins	-6%
Gross Margins	51%
Op. Margins	-4%
Sales Growth YoY	13%
Sales Growth QoQ	5%
Sales CAGR	23%
FCF CAGR	11%
Equity CAGR	24%
Earnings Growth YoY	-101%
Earnings Growth QoQ	-101%

Sales CAGR 5Y	16%
FCF CAGR 5Y	191%
Equity CAGR 5Y	-5%
Earnings CAGR 3Y	11%
Sales CAGR 3Y	11%
FCF CAGR 3Y	389%
Equity CAGR 3Y	6%
Market Cap	$5.28B
Revenue	$696.46M
Assets	$1.29B
Total Debt	$492.45M
Cash	$360.79M
Shares Outstanding	60.11M
EV	5.41B
Moat Score	9%
Safety Score	87%
Working Capital	159.76M
Current Ratio	1.4
Gross Profit	$354.48M
Shares Growth 3y	2%
Equity Growth QoQ	5%
Equity Growth YoY	15%

Assets & ROA

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Stockholders Equity & ROE

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Q2 Holdings Inc. is a provider of cloud-based virtual banking solutions for regional financial institutions to deliver mobile banking services to retail and commercial end-users who wish to bank anywhere and anytime. Its solutions operate on an integrated tablet-first platform which provides financial institutions a comprehensive view of account holder activity, and meets the regulatory and security requirements applicable to the industry. The firm generates revenue from subscription-based arrangements for software offerings, typically for five years. A large majority of the firm's revenue is generated in the United States.

SEC Filings

Direct access to Q2 Holdings, Inc. (QTWO) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Q2 Holdings, Inc. compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Q2 Holdings, Inc. compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

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Q2 Holdings, Inc. Discounted Cash Flow

Fully customizable DCF calculator online for Q2 Holdings, Inc..

Years

Calculation mode

= $2.8B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$129M	$143M	$159M	$177M	$196M	$218M	$242M	$268M	$298M	$331M	$367M	$3.7B
DCF		$130M	$131M	$133M	$134M	$135M	$136M	$138M	$139M	$140M	$142M	$1.4B
Value	$2.8B

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.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Net Margins	-23%	-24%	-13%	-15%	-22%	-34%	-23%	-19%	-10%	-6%	-6%
ROA	-	-18%	-12%	-7%	-7%	-7%	-6%	-8%	-5%	-2%	-2%
ROE	-	-36%	-25%	-22%	-19%	-21%	-20%	-26%	-15%	-7%	-7%

Bad Net Margins (-5.53%)

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

Safety and Stability

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.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Debt over FCF	-	-	-0	-21.03	-31.96	-20.95	49.38	26.31	7.59	3.82	3.82
Debt over Equity	-	-	0	1.15	1.12	0.87	0.97	1.6	1.09	0.95	0.95
Growth Stability	-	-	-	-	-	-	-	-	-	-	1

Neutral Debt/FCF ratio (3.82)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Good Debt/Equity ratio (0.95)

The company is not overleveraged and has a good balance between equity and debt.

Good Graham’s Stability (1)

The company has a good stability in its earnings, which is a sign of a good competitive advantage.

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.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	CAGR 5Y
Revenue YoY growth	-	38%	29%	24%	31%	28%	24%	13%	10%	12%	16%
Earnings YoY growth	-	45%	-28%	35%	100%	94%	-18%	-3%	-40%	-41%	-
Equity YoY growth	-	-15%	6%	49%	139%	70%	-11%	-27%	7%	15%	-5%
FCF YoY growth	-	534%	-74%	206%	53%	100%	-142%	127%	154%	100%	191%