Q2 Holdings Reports $38.5 Million Net Loss, 11.5% Revenue Growth for Fiscal Year 2024

Q2 Holdings, Inc. reported a net loss of $38.5 million for the fiscal year ended December 31, 2024, compared to a net loss of $65.4 million for the prior year. Total revenues increased by 11.5% year-over-year, reaching $696.4 million. This increase was primarily driven by a $77.7 million rise in subscription revenue and a $3.1 million increase in transactional revenue, partially offset by an $8.9 million decrease in services and other revenue. Cost of revenues increased by 6.2% to $342.0 million, primarily due to higher personnel costs, increased infrastructure costs, and amortization of capitalized costs.

Operating expenses showed mixed results. Sales and marketing expenses decreased by 3.3% to $106.0 million, while research and development expenses increased by 4.3% to $143.2 million, and general and administrative expenses rose by 11.6% to $122.9 million. These changes reflect investments in research and development and personnel to support growth, alongside cost-cutting measures in sales and marketing. Amortization of acquired intangibles decreased by 17.8% to $17.0 million, and lease and other restructuring charges decreased by 30.5% to $7.6 million.

As of December 31, 2024, Q2 Holdings had 460 installed digital banking platform customers, serving approximately 24.7 million registered account holders. End users logged into the platform over 4 billion times during 2024, executing over $3.3 trillion in financial transactions. The company's net revenue retention rate was 109% for the year, and its subscription net revenue retention rate was 114%. Subscription ARR was $681.9 million, and Total ARR was $824.2 million. Annual revenue churn was 4.4%. The company employed 2,477 employees as of December 31, 2024, with 1,659 in the United States and 817 internationally.

The company's outlook is tied to several factors, including the continued adoption of its solutions by financial institutions and FinTechs, the success of its growth strategies, and the overall economic environment. Q2 Holdings highlighted risks associated with cybersecurity threats, economic uncertainty impacting customer spending, the integration of third-party systems, and the complexities of managing growth. The company also noted its reliance on key personnel and the potential for future losses, while emphasizing its plans to continue investing in innovation and expansion. The company's cash, cash equivalents, and investments totaled $446.6 million as of December 31, 2024.