Q2 Holdings’ Q2 Earnings Preview

RBC Capital analysts provided their views on Q2 Holdings, Inc. (NYSE:QTWO) ahead of the company’s Q2 earnings, expected to be reported in early August.

The analysts expect quarterly revenue and EBITDA to be approximately $140 million (up 12.8% year-over-year) and $8 million (down 20% year-over-year), respectively. The analysts believe investors will be focused on proof points of H2/22 revenue acceleration, which is supported by continued momentum in the digitization of financial institutions and a differentiated product offering in Innovation Studio. The analysts also like the company’s setup into the print as management’s transparency about H1/22’s cyclical softness likely abates as the backlog is converted.

The analysts remain constructive on the shares (outperform rating, $76 price target), as the company continues to benefit from (1) expanding its large and growing TAM, through differentiated solutions such as BaaS and the Innovation Studio, (2) resilience in the demand for digital banking, regardless of a recession, and (3) GTM shifts which enable a stronger cross-selling motion of the entire Q2 portfolio, with potential to result in greater customer wallet share.