Q2 Holdings, Inc. - FORM 8-K - EX-99.1 - February 17, 2021

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Exhibit 99.1
Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2020 Financial Results

AUSTIN, Texas (February 17, 2021)—Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for banking and lending, today announced results for its fourth quarter and full year ending December 31, 2020.

GAAP Results for the Fourth Quarter and Full-Year 2020

•Revenue for the fourth quarter of $109.0 million, up 26 percent year-over-year and up 5 percent from the third quarter of 2020. Full-year 2020 revenue totaled $402.8 million, up 28 percent year-over-year.

•GAAP gross margin for the fourth quarter of 40.8 percent, down from 48.4 percent for the prior-year quarter and 44.7 percent for the third quarter of 2020. GAAP gross margin for full-year 2020 of 43.4 percent, down from 48.5 percent for the full-year 2019.

•GAAP net loss for the fourth quarter of $37.8 million, compared to GAAP net losses of $15.7 million for the prior-year quarter and $26.7 million for the third quarter of 2020. GAAP net loss for full-year 2020 of $137.6 million, which compares to $70.9 million for full-year 2019.

Non-GAAP Results for the Fourth Quarter and Full-Year 2020

•Non-GAAP revenue for the fourth quarter of $109.7 million, up 24 percent year-over-year and up 5 percent from the third quarter of 2020. Full-year 2020 non-GAAP revenue totaled $407.2 million, up 28 percent year-over-year.

•Non-GAAP gross margin for the fourth quarter of 48.3 percent, down from 56.8 percent for the prior-year quarter and 52.5 percent for the third quarter of 2020. Non-GAAP gross margin for full-year 2020 of 51.9 percent, down from 54.0 percent for full-year 2019.

•Adjusted EBITDA for the fourth quarter of $6.1 million, down from $10.6 million for the prior-year quarter and $8.1 million for the third quarter of 2020. Full-year 2020 adjusted EBITDA of $22.2 million compared to $19.6 million for the full-year 2019.

During the fourth quarter, the company recorded a contract asset impairment associated with a fintech customer and an accounting adjustment pertaining to its Cloud Lending business. These combined adjustments resulted in a positive impact to revenue and a negative impact to cost of revenue and gross margin, resulting in a 370 basis point reduction to both our GAAP and non-GAAP gross margin for the fourth quarter and a 90 basis point reduction to both our GAAP and non-GAAP gross margin for the full-year 2020. Please see the table below for more information regarding these impacts.

For a reconciliation of our GAAP to non-GAAP results, please see the tables below.

"While 2020 was unprecedented in many ways, I'm proud of the way our teams performed in the fourth quarter and throughout the year," said Q2 CEO Matt Flake. "Our delivery teams had a particularly good quarter, closing out a record year in which we added over 3.1 million registered users. We also had several notable sales wins and another strong quarter of renewals and cross-sale activity. In 2020, we demonstrated the resiliency and flexibility of our business, and we believe the strength of our pipeline and product portfolio position us for continued success in 2021."



Fourth Quarter Highlights

•Signed a loan pricing contract with an enterprise bank in the United States, a subsidiary of a top 10 global bank.

•Signed a commercial banking contract with an existing Tier 1 customer, an $8 billion financial institution.

•Signed a loan pricing contract with an existing Tier 1 customer, a $6 billion financial institution.

•Exited the fourth quarter with approximately 17.8 million registered users on the Q2 Platform, representing 22 percent year-over-year growth and 4 percent sequential growth from the previous quarter.

"Our business performance for the quarter was solid as we exceeded the high end of our revenue guidance," said Q2 CFO David Mehok. "Free cash flow in the fourth quarter was $11.6 million as we ended with cash, cash equivalents and investments of $539.1 million, primarily due to the net proceeds raised in November through the privately negotiated issuance of convertible senior notes due in 2025 and partial exchange of our previously issued convertible notes maturing in 2023. We believe our improved balance sheet and continued success in operational delivery has positioned us well to capitalize on the long-term market opportunity."

Financial outlook

As of February 17, 2021, Q2 Holdings is providing guidance for its first quarter of 2021 and full-year 2021, which represents Q2 Holdings' current estimates of the anticipated impacts of the COVID-19 pandemic on Q2 Holdings' operations and financial results. The financial information below represents forward-looking, non-GAAP financial information, including estimates of non-GAAP revenue and adjusted EBITDA. GAAP net loss is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes items such as depreciation and amortization, stock-based compensation, acquisition-related costs, interest, income taxes, unoccupied lease charges, partnership termination charges, and the impact to deferred revenue from purchase accounting. Q2 Holdings is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Q2 Holdings has not provided guidance for GAAP net loss or a reconciliation of the foregoing forward-looking adjusted EBITDA guidance to GAAP net loss. However, it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods.

Q2 Holdings is providing guidance for its first quarter of 2021 as follows:

•Total non-GAAP revenue of $114.6 million to $116.1 million, which would represent year-over-year growth of 22 percent to 24 percent.

•Adjusted EBITDA of $8.5 million to $9.1 million.

Q2 Holdings is providing guidance for the full-year 2021 as follows:

•Total non-GAAP revenue of $488.0 million to $491.0 million, which would represent year-over-year growth of 20 to 21 percent.

•Adjusted EBITDA of $34.5 million to $36.5 million, representing 7 percent of non-GAAP revenue for the year.



Conference Call Details
Date:     
Thursday, February 18, 2021
Time:
8:30 a.m. EST
Hosts:
Matt Flake, CEO / David Mehok, CFO
Conference ID:1397098
Registrationhttp://www.directeventreg.com/registration/event/1397098

Please join the conference call at least 10 minutes early to ensure the line is connected. A live webcast of the conference call and financial results will be accessible from the investor relations section of the Q2 website at http://investors.Q2.com/.

An archived replay of the webcast will be available on this website on a temporary basis shortly after the call.

About Q2 Holdings, Inc.
Q2 is a financial experience company dedicated to providing digital banking and lending solutions to banks, credit unions, alternative finance, and fintech companies in the U.S. and internationally. With comprehensive end-to-end solution sets, Q2 enables its partners to provide cohesive, secure, data-driven experiences to every account holder – from consumer to small business and corporate. Headquartered in Austin, Texas, Q2 has offices throughout the world and is publicly traded on the NYSE under the stock symbol QTWO. To learn more, please visit Q2.com.

Use of Non-GAAP Measures

Q2 uses the following non-GAAP financial measures: non-GAAP revenue; adjusted EBITDA; non-GAAP gross margin; non-GAAP gross profit; non-GAAP sales and marketing expense; non-GAAP research and development expense; non-GAAP general and administrative expense; non-GAAP operating expense; non-GAAP operating income (loss); non-GAAP net income; non-GAAP net income per share; and pro forma weighted-average diluted number of common shares outstanding. Management believes that these non-GAAP financial measures are useful measures of operating performance because they exclude items that Q2 does not consider indicative of its core performance.

In the case of non-GAAP revenue, Q2 adjusts revenue to exclude the impact to deferred revenue from purchase accounting adjustments. In the case of adjusted EBITDA, Q2 adjusts net loss for such items as interest, taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, unoccupied lease charges, partnership termination charges and the impact to deferred revenue from purchase accounting. In the case of non-GAAP gross margin and non-GAAP gross profit, Q2 adjusts gross profit and gross margin for stock-based compensation amortization of acquired technology, acquisition-related costs, and the impact to deferred revenue from purchase accounting. In the case of non-GAAP sales and marketing expense, non-GAAP research and development expense, and non-GAAP general and administrative expense, Q2 adjusts the corresponding GAAP expense to exclude stock-based compensation. Non-GAAP Operating Expense is calculated by taking the sum of non-GAAP sales and marketing expenses, non-GAAP research and development expense, and non-GAAP general and administrative expense. In the case of non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share, Q2 adjusts operating loss and net loss, respectively, for stock-based compensation, acquisition-related costs, amortization of acquired technology, amortization of acquired intangibles, unoccupied lease charges, partnership termination charges, and the impact to deferred revenue from purchase accounting, and with respect to non-GAAP net income, amortization of debt discount and issuance costs. In the case of pro forma diluted weighted-average number of common shares outstanding, Q2 adjusts the diluted weighted-average number of common shares outstanding by the weighted-average effect of potentially dilutive shares.



There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting, and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income (loss). As a result, these non-GAAP financial measures have limitations and should be considered in addition to, not as a substitute for or superior to, the closest GAAP measures or other financial measures prepared in accordance with GAAP. A reconciliation to the closest GAAP measures of these non-GAAP measures is contained in tabular form on the attached unaudited condensed consolidated financial statements.

Q2's management uses these non-GAAP measures as measures of operating performance; to prepare Q2's annual operating budget; to allocate resources to enhance the financial performance of Q2's business; to evaluate the effectiveness of Q2's business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of Q2's results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communication with our board of directors concerning Q2's financial performance.

Forward-looking Statements

This press release contains forward-looking statements, including statements about: the resiliency and flexibility of Q2's business; the strength of Q2's pipeline and product portfolio to position it for continued success; Q2's improved balance sheet and continued success in operational delivery; Q2's position to capitalize on its long-term market opportunity; and, Q2's quarterly and annual financial guidance. The forward-looking statements contained in this press release are based upon Q2's historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include the adverse impacts of the COVID-19 pandemic on Q2's business operations and on global economic and financial markets, including on Q2's customers, partners and suppliers and employees and business, as well as risks related to: (a) the risk of increased competition in its existing markets and as it enters new sections of the market with Tier 1 customers, new markets with Alt-FIs and fintechs and new products and services; (b) the risk that COVID-19, government actions or other factors continue to negatively impact or disrupt the markets for Q2's solutions and that the markets for Q2’s solutions do not return to normal or grow as anticipated, in particular with respect to Tier 1 customers and Alt-FI and fintech customers; (c) the risk that Q2's increased focus on selling to larger Tier 1 customers may result in greater uncertainty and variability in Q2's business and sales results; (d) the risk that changes in Q2’s market, business or sales organization negatively impact its ability to sell its products and services; (e) the challenges and costs associated with selling, implementing and supporting Q2's solutions, particularly for larger customers with more complex requirements and longer implementation processes, including risks related to the timing and predictability of sales of Q2's solutions and the impact that the timing of bookings may have on Q2's revenue and financial performance in a period; (f) the risk that errors, interruptions or delays in Q2's products or services or Web hosting negatively impacts Q2's business and sales; (g) risks associated with cyberattacks, data breaches and breaches of security measures within Q2's products, systems and infrastructure or the products, systems and infrastructure of third parties upon which Q2 relies and the resultant costs and liabilities and harm to Q2's business and reputation and its ability to sell its products and services; (h) the impact that a slowdown in the economy, financial markets and credit markets may have on Q2's customers and Q2's business sales cycles, prospects and customers’ spending decisions and timing of implementation decisions, particularly in regions where a significant number of Q2’s customers are concentrated; (i) the difficulties and risks associated with developing and selling complex new solutions and enhancements with the technical and regulatory specifications and functionality required by customers and governmental authorities; (j) the risks inherent in technology and implementation partnerships that could cause harm to Q2's business; (k) the difficulties and costs Q2 may encounter with complex implementations of its solutions and the resulting impact on reputation and the timing of its revenue from any delayed implementations; (l) the risk that Q2 will not be able to maintain historical contract terms such as pricing and duration; (m) the risks


associated with managing growth and the challenges associated with improving operations and hiring, retaining and motivating employees to support such growth; (n) the risk that modifications or negotiations of contractual arrangements will be necessary during Q2's implementations of its solutions or the general risks associated with the complexity of Q2's customer arrangements; (o) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (p) the risks associated with anticipated higher operating expenses in 2021 and beyond; (q) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (r) the risks associated with further consolidation in the financial services industry; (s) risks associated with selling Q2 solutions internationally; and (t) the risk that Q2 debt repayment obligations may adversely affect its financial condition and cash flows from operations in the future and that Q2 may not be able to obtain capital when desired or needed on favorable terms.

Additional information relating to the uncertainty affecting the Q2 business is contained in Q2's filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Q2's website at http://investors.Q2.com/. These forward-looking statements represent Q2's expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Q2 disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.



MEDIA CONTACT:INVESTOR CONTACT:
Maria AbbeJosh Yankovich
Q2 Holdings, Inc.Q2 Holdings, Inc.
O: 1-512-846-3737 ext. 7037O: 1-512- 682-4463
maria.abbe@Q2.comjosh.yankovich@Q2.com



Q2 Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31, 2020December 31, 2019
(unaudited)(unaudited)
Assets
Current assets:
Cash and cash equivalents$407,703 $100,094 
Restricted cash3,482 3,468 
Investments131,352 32,325 
Accounts receivable, net36,430 22,442 
Contract assets, current portion1,088 872 
Prepaid expenses and other current assets8,861 6,354 
Deferred solution and other costs, current portion19,042 15,609 
Deferred implementation costs, current portion8,258 5,171 
Total current assets616,216 186,335 
Property and equipment, net49,558 39,252 
Right of use assets34,709 35,388 
Deferred solution and other costs, net of current portion32,782 29,220 
Deferred implementation costs, net of current portion15,184 15,848 
Intangible assets, net184,859 223,861 
Goodwill462,274 462,023 
Contract assets, net of current portion18,694 15,189 
Other long-term assets2,426 2,318 
Total assets$1,416,702 $1,009,434 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities$57,047 $65,976 
Deferred revenues, current portion81,935 57,850 
Lease liabilities, current portion6,844 9,140 
Total current liabilities145,826 132,966 
Convertible notes, net of current portion557,468 424,784 
Deferred revenue, net of current portion29,203 32,954 
Lease liabilities, net of current portion36,739 36,079 
Other long-term liabilities4,102 3,239 
Total liabilities773,338 630,022 
Stockholders' equity:
Common stock6 5 
Additional paid-in capital1,024,577 622,692 
Accumulated other comprehensive income (loss)(32)14 
Accumulated deficit(381,187)(243,299)
Total stockholders' equity 643,364 379,412 
Total liabilities and stockholders' equity$1,416,702 $1,009,434 


Q2 Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands, except per share data)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
(unaudited)(unaudited)(unaudited)(unaudited)
Revenues (1)
$108,986 $86,840 $402,751 $315,484 
Cost of revenues (2) (3)
64,476 44,802 228,152 162,485 
Gross profit44,510 42,038 174,599 152,999 
Operating expenses:
Sales and marketing (2)
17,726 16,576 72,323 63,947 
Research and development (2)
25,213 19,881 97,381 76,273 
General and administrative (2)
17,061 15,382 70,937 56,739 
Acquisition related costs500 8,574 478 16,027 
Amortization of acquired intangibles4,441 3,307 17,888 6,339 
Partnership termination charges— — 13,244 — 
Unoccupied lease charges (4)
45 176 2,181 420 
Total operating expenses64,986 63,896 274,432 219,745 
Loss from operations(20,476)(21,858)(99,833)(66,746)
Other income (expense), net (5)
(16,550)(5,988)(36,371)(16,618)
Loss before income taxes(37,026)(27,846)(136,204)(83,364)
Benefit from (provision for) income taxes(795)12,180 (1,416)12,487 
Net Loss$(37,821)$(15,666)$(137,620)$(70,877)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale investments(52)(24)(118)223 
Foreign currency translation adjustment58 (103)72 (172)
Comprehensive loss$(37,815)$(15,793)$(137,666)$(70,826)
Net loss per common share:
Net loss per common share, basic and diluted$(0.69)$(0.32)$(2.65)$(1.53)
Weighted average common shares outstanding, basic and diluted54,632 48,363 52,019 46,198 

(1)    Includes deferred revenue reduction from purchase accounting of $0.7 million and $1.8 million for the three months ended December 31, 2020 and 2019, respectively, and $4.4 million and $1.8 million for the twelve months ended December 31, 2020 and 2019, respectively.

(2)    Includes stock-based compensation expenses as follows:
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Cost of revenues$2,466 $1,973 $9,888 $6,427 
Sales and marketing2,417 2,278 8,770 7,740 
Research and development3,089 2,781 12,869 9,864 
General and administrative4,348 3,811 17,708 15,347 
Total stock-based compensation expenses$12,320 $10,843 $49,235 $39,378 

(3)    Includes amortization of acquired technology of $5.2 million and $4.4 million for the three months ended December 31, 2020 and 2019, respectively, and $21.3 million and $9.9 million for the twelve months ended December 31, 2020 and 2019, respectively.

(4)    Unoccupied lease charges include costs related to the early exit from various facilities, partially offset by anticipated sublease income from these facilities. For the three and twelve months ended December 31, 2020, the charges related to facilities in California, North Carolina, and Texas, and for the three and twelve months ended December 31, 2019, the charges related to facilities in Georgia.

(5)    The three and twelve months ended December 31, 2020 includes an $8.9 million reduction related to the loss on the early extinguishment of a portion of our 2023 Notes.


Q2 Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)

Twelve Months Ended December 31,
20202019
(unaudited)(unaudited)
Cash flows from operating activities:
Net loss$(137,620)$(70,877)
Adjustments to reconcile net loss to net cash
from operating activities:
Amortization of deferred implementation, solution and other costs22,936 13,634 
Depreciation and amortization51,840 28,457 
Amortization of debt issuance costs1,977 1,467 
Amortization of debt discount21,317 15,154 
Amortization of premiums on investments366 226 
Stock-based compensation expenses50,682 40,510 
Deferred income taxes946 (12,774)
Loss on extinguishment of debt8,932 — 
Other non-cash charges2,626 885 
Changes in operating assets and liabilities(26,892)(16,115)
Net cash provided by (used in) operating activities(2,890)567 
Cash flows from investing activities:
Net maturities (purchases) of investments(99,496)36,650 
Purchases of property and equipment(23,715)(13,860)
Business combinations, net of cash acquired— (505,577)
Purchases of intangible assets— (288)
Capitalization of software development costs(952)(177)
Net cash used in investing activities(124,163)(483,252)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs311,321 195,289 
Proceeds from issuance of convertible notes, net of issuance costs132,589 307,016 
Purchase of capped call transactions(39,830)(40,765)
Proceeds from bond hedge related to convertible notes171,679 — 
Payments for warranted related to convertible notes(137,538)— 
Proceeds from exercise of stock options to purchase common stock13,317 14,551 
Payment for contingent consideration(16,862)— 
Net cash provided by financing activities434,676 476,091 
Net increase (decrease) in cash, cash equivalents, and restricted cash307,623 (6,594)
Cash, cash equivalents, and restricted cash, beginning of period103,562 110,156 
Cash, cash equivalents, and restricted cash, end of period$411,185 $103,562 



Q2 Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share data)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
(unaudited)(unaudited)(unaudited)(unaudited)
GAAP revenue$108,986 $86,840 $402,751 $315,484 
Deferred revenue reduction from purchase accounting684 1,829 4,404 1,829 
Non-GAAP revenue$109,670 $88,669 $407,155 $317,313 
GAAP gross profit$44,510 $42,038 $174,599 $152,999 
Stock-based compensation2,466 1,973 9,888 6,427 
Amortization of acquired technology5,157 4,357 21,341 9,871 
Acquisition related costs194 193 929 291 
Deferred revenue reduction from purchase accounting684 1,829 4,404 1,829 
Non-GAAP gross profit$53,011 $50,390 $211,161 $171,417 
Non-GAAP gross margin:
Non-GAAP gross profit$53,011 $50,390 $211,161 $171,417 
Non-GAAP revenue109,670 88,669 407,155 317,313 
Non-GAAP gross margin48.3 %56.8 %51.9 %54.0 %
GAAP sales and marketing expense$17,726 $16,576 $72,323 $63,947 
Stock-based compensation(2,417)(2,278)(8,770)(7,740)
Non-GAAP sales and marketing expense$15,309 $14,298 $63,553 $56,207 
GAAP research and development expense$25,213 $19,881 $97,381 $76,273 
Stock-based compensation(3,089)(2,781)(12,869)(9,864)
Non-GAAP research and development expense$22,124 $17,100 $84,512 $66,409 
GAAP general and administrative expense$17,061 $15,382 $70,937 $56,739 
Stock-based compensation(4,348)(3,811)(17,708)(15,347)
Non-GAAP general and administrative expense$12,713 $11,571 $53,229 $41,392 
GAAP operating loss$(20,476)$(21,858)$(99,833)$(66,746)
Deferred revenue reduction from purchase accounting684 1,829 4,404 1,829 
Partnership termination charges— — 13,244 — 
Stock-based compensation12,320 10,843 49,235 39,378 
Acquisition related costs694 8,766 1,408 16,316 
Amortization of acquired technology5,157 4,357 21,341 9,871 
Amortization of acquired intangibles4,441 3,307 17,888 6,339 
Unoccupied lease charges45 176 2,181 420 
Non-GAAP operating income $2,865 $7,420 $9,868 $7,407 
GAAP net loss$(37,821)$(15,666)$(137,620)$(70,877)
Deferred revenue reduction from purchase accounting684 1,829 4,404 1,829 
Partnership termination charges— — 13,244 — 
Loss on extinguishment of debt8,932 — 8,932 — 
Stock-based compensation12,320 10,843 49,235 39,378 
Acquisition related costs694 8,766 1,408 16,316 
Amortization of acquired technology5,157 4,357 21,341 9,871 
Amortization of acquired intangibles4,441 3,307 17,888 6,339 
Unoccupied lease charges45 176 2,181 420 
Amortization of debt discount and issuance costs6,486 5,519 23,294 16,672 
Non-GAAP net income $938 $19,131 $4,307 $19,948 
Reconciliation from diluted weighted-average number of common shares as reported to pro forma diluted weighted average number of common shares
Diluted weighted-average number of common shares, as reported54,632 48,363 52,019 46,198 
Non-GAAP weighted-average effect of potentially dilutive shares3,197 2,148 2,403 2,448 
Pro forma diluted weighted-average number of common shares57,829 50,511 54,422 48,646 
Calculation of non-GAAP income per share:
Non-GAAP net income$938 $19,131 $4,307 $19,948 
Pro forma diluted weighted-average number of common shares 57,829 50,511 54,422 48,646 
Non-GAAP net income per share$0.02 $0.38 $0.08 $0.41 
Reconciliation of GAAP net loss to adjusted EBITDA:
GAAP net loss$(37,821)$(15,666)$(137,620)$(70,877)
Depreciation and amortization12,865 10,729 51,840 28,457 
Stock-based compensation12,320 10,843 49,235 39,378 
(Benefit from) provision for income taxes795 (12,180)1,416 (12,487)
Interest (income) expense, net7,594 6,064 27,180 16,572 
Acquisition related costs694 8,766 1,408 16,316 
Unoccupied lease charges45 176 2,181 420 
Loss on extinguishment of debt8,932 — 8,932 — 
Deferred revenue reduction from purchase accounting684 1,829 4,404 1,829 
Partnership termination charges— — 13,244 — 
Adjusted EBITDA$6,108 $10,561 $22,220 $19,608 

Q2 Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Revenue Guidance
(in thousands)
Q1 2021 GuidanceFull Year 2021 Guidance
LowHighLowHigh
GAAP Revenue$114,067 $115,567 $486,301 $489,301 
Deferred revenue reduction from purchase accounting533 533 1,699 1,699 
Non-GAAP revenue$114,600 $116,100 $488,000 $491,000 


Q2 Holdings, Inc.
Impacts of Impairment Charge and Accounting Adjustment
(in thousands)


Three Months Ended December 31, 2020
(unaudited)
Impact to revenue:
Cloud Lending revenue accounting adjustment$3,305 
Contract asset impairment charge$(2,838)
Total impact to revenue$467 
Impact to cost of revenue:
Cloud Lending revenue accounting adjustment$4,218 
Total impact to cost of revenue$4,218 


Q2 Holdings, Inc. Reports