Core Insights - Koxa Corp. has launched its Treasury Gateway platform in collaboration with Q2 Direct ERP, aimed at enhancing banking operations for commercial customers within their ERP systems [1][4] - The integration allows treasury clients to manage payments and reporting directly from their ERP environment, improving efficiency and reducing risks [3][6] Company Overview - Koxa Corp. specializes in ERP-banking solutions, connecting banks to corporate treasury clients and enabling banking functionalities within ERP systems [6] - Q2 Holdings, Inc. is a provider of digital transformation solutions for financial services, serving a range of financial institutions both in the U.S. and internationally [2][7] Product Features - Koxa's Treasury Gateway enables clients to submit, approve, and release payments, track payment statuses, and access reporting data without leaving their ERP [3][6] - The platform is pre-integrated via Q2 Innovation Studio, facilitating rapid deployment for financial institutions [5] Market Demand - There is a growing demand for ERP connectivity in the banking sector, prompting partnerships like that of Koxa and Q2 to enhance treasury management solutions [5]

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to investment positions and opinions [1][2] Summary by Categories - **Company Analysis**: No specific company analysis or performance data is provided in the article [1][2] - **Industry Insights**: The article lacks any insights or trends related to specific industries [1][2] - **Market Performance**: There are no references to market performance or financial metrics in the content [1][2]

Core Insights - Q2 Holdings, Inc. reported strong earnings for Q1, with earnings per share of 50 cents, surpassing the analyst consensus estimate of 47 cents [1] - The company achieved quarterly sales of $189.74 million, exceeding the analyst consensus estimate of $186.67 million [1] Financial Performance - The first quarter bookings performance was characterized by significant renewals and expansion activity, indicating the value of the company's solutions [2] - Q2 Holdings raised its FY2025 sales guidance from a range of $772 million-$779 million to $776 million-$783 million [2] Stock Market Reaction - Following the earnings announcement, Q2 Holdings shares increased by 7.7%, trading at $86.46 [3] - Analysts adjusted their price targets for Q2 Holdings after the earnings report, with some maintaining their ratings [3][8] Analyst Opinions - Needham analyst Mayank Tandon maintained a Buy rating on Q2 Holdings but lowered the price target from $125 to $110 [8] - Baird analyst Jon Vruwink maintained a Neutral rating and raised the price target from $84 to $90 [8]

Core Viewpoint - The conference call is focused on Q2 Holdings' financial results for the first quarter of 2025, highlighting the company's performance and future expectations in the financial services industry [2][3]. Company Participants - Key participants in the conference call include Matt Flake (CEO), Jonathan Price (CFO), and Kirk Coleman (President), along with Josh Yankovich (Investor Relations) leading the discussion [1][3]. Industry Context - The call includes forward-looking statements regarding the sales, operating, and financial performance of Q2 Holdings and the broader financial services industry, indicating a focus on future growth and challenges [3].

Company Performance - Q2 Holdings reported quarterly earnings of $0.54 per share, exceeding the Zacks Consensus Estimate of $0.48 per share, and up from $0.31 per share a year ago, representing an earnings surprise of 12.50% [1] - The company posted revenues of $189.74 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.73%, compared to year-ago revenues of $165.51 million [2] - Over the last four quarters, Q2 Holdings has surpassed consensus revenue estimates four times, but has only beaten consensus EPS estimates once [2] Stock Outlook - Q2 Holdings shares have declined approximately 21.2% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $191.56 million, and for the current fiscal year, it is $2.13 on revenues of $774.84 million [7] Industry Context - The Internet - Software industry, to which Q2 Holdings belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Q2 Holdings' stock performance [5]

Financial Data and Key Metrics Changes - The company reported revenue of $189.7 million for Q1 2025, representing a 15% year-over-year increase and a 4% sequential increase [8][14] - Adjusted EBITDA was $40.7 million, accounting for 21.5% of revenue, which is a 61% increase from $25.2 million in the prior year [8][18] - Free cash flow generated was $37.8 million, exceeding typical seasonal patterns due to favorable timing with larger customer invoicing [8][19] Business Line Data and Key Metrics Changes - Subscription-based revenues grew by 18% year-over-year and 5% sequentially, making up 81% of total revenue [15] - Services and other revenues declined by 7% year-over-year, primarily due to a reduction in professional service revenues [15] - Total annualized recurring revenue (ARR) increased to $847 million, up 11% year-over-year, driven by strength in subscription ARR, which grew to $720 million, up 14% year-over-year [16] Market Data and Key Metrics Changes - The company signed a Tier one relationship pricing deal with a bank to enhance commercial relationship profitability across lending and deposit product lines [9] - Expansion activity was noted with a top 50 U.S. bank signing a deal for risk and fraud solutions, indicating a growing demand for fraud management [10] Company Strategy and Development Direction - The company aims to focus on higher-margin recurring subscription revenues, which positions it well for sustainable profitable growth [15] - The management emphasized the importance of fraud mitigation solutions, which are expected to remain a priority for customers [10][22] - The company plans to continue investing in R&D and expanding its partner ecosystem to deliver innovation quickly [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability due to the mission-critical nature of its products and a strong customer base [12][20] - The company anticipates a solid pipeline for the remainder of the year, with strong renewal and expansion opportunities [12][20] - Despite macroeconomic uncertainties, the company believes its strong financial foundation will help navigate potential challenges [20][21] Other Important Information - Gross margins improved to 57.9%, up from 54.9% in the prior year, driven by a higher mix of subscription-based revenues [17] - Total operating expenses were $77 million, or 40.7% of revenue, showing improvement in operational efficiency [18] Q&A Session Summary Question: Insights on fraud management traction and pipeline - Management indicated that fraud management is a differentiator in both new deals and expansions, with significant opportunities for growth in this area [26][28] Question: Confidence in renewal opportunities for 2025 and 2026 - Management confirmed that the confidence is based on the number of logos up for renewal, similar to previous years [29][31] Question: Macro assumptions in raised outlook - Management stated that no different macro assumptions were incorporated into the raised outlook compared to the last quarter [35][36] Question: Performance in the credit union market - Management noted strong performance in the credit union sector, with many looking to diversify their offerings and enhance commercial capabilities [38][39] Question: Cash flow performance and future expectations - Management acknowledged an anomaly in Q1 cash flow due to a large customer switching to annual payments, but remains confident in maintaining high free cash flow conversion [75][76] Question: Subscription growth versus ARR growth - Management explained that subscription ARR is a leading indicator for subscription revenue, with current patterns reflecting previous trends [108]

Financial Data and Key Metrics Changes - The company reported revenue of $189.7 million for Q1 2025, representing a 15% year-over-year increase and a 4% sequential increase [6][13] - Adjusted EBITDA reached $40.7 million, accounting for 21.5% of revenue, which is a 61% increase from $25.2 million in the prior year [6][18] - Free cash flow was $37.8 million, exceeding typical seasonal patterns due to favorable timing with larger customer invoicing [6][18] Business Line Data and Key Metrics Changes - Subscription-based revenues grew by 18% year-over-year and 5% sequentially, making up 81% of total revenue [14] - Services and other revenues declined by 7% year-over-year, primarily due to a reduction in professional service revenues [14] - Total annualized recurring revenue (ARR) increased to $847 million, up 11% year-over-year, driven by strength in subscription ARR, which grew to $720 million, up 14% year-over-year [15][16] Market Data and Key Metrics Changes - The company signed a Tier one relationship pricing deal with a bank to enhance commercial relationship profitability across lending and deposit products [7] - Expansion activity within the existing customer base was significant, with a top 50 U.S. bank signing an expansion deal for risk and fraud solutions [8][10] - The company continues to see strong renewal activity, signing renewals with three of its top 10 largest customers [10][11] Company Strategy and Development Direction - The company emphasizes the importance of fraud management as a growing priority for financial institutions, which is expected to drive future bookings [22] - The focus on deposit gathering remains critical, especially in the current macroeconomic environment, which has been a tailwind for sales efforts [12] - The company aims to maintain operational efficiency while investing in innovation to meet evolving customer needs [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability due to the mission-critical nature of its products and a strong, diverse customer base [11][20] - The company anticipates a solid pipeline for the remainder of the year, with strong renewal and expansion opportunities [12][20] - Despite macroeconomic uncertainties, management believes the company is well-positioned to navigate potential challenges while prioritizing long-term customer success [20] Other Important Information - Gross margins improved to 57.9%, up from 54.9% in the prior year, driven by a higher mix of subscription-based revenues [17] - Total operating expenses were $77 million, or 40.7% of revenue, showing improvement from 44% in the prior year [18] - The company raised its full-year revenue guidance to a range of $776 million to $783 million, representing year-over-year growth of 11% to 12% [19] Q&A Session Summary Question: Insights on fraud management traction - Management noted that fraud management is a differentiator in both new deals and expansions, with significant opportunities for growth in this area [26][28] Question: Confidence in renewal opportunities for 2025 and 2026 - Management confirmed that the confidence is based on the number of logos up for renewal, indicating a similar opportunity set compared to previous years [29][30] Question: Macro assumptions in raised outlook - Management stated that the raised outlook did not incorporate different macro assumptions, maintaining confidence in the 2025 numbers [35] Question: Credit union market focus - Management highlighted strong performance in the credit union sector, with a focus on diversifying their offerings to include more commercial customers [38] Question: Cash flow performance and future expectations - Management indicated that the strong cash flow in Q1 was partly due to a large customer switching to annual payments, which may not be repeated in Q2 [72][74] Question: Subscription growth versus ARR growth - Management explained that subscription ARR is a leading indicator for subscription revenue, with expected patterns reflecting previous years [104][106]

Customer Growth and Engagement - As of December 31, 2024, the company had 460 Installed Customers on its digital banking platform, an increase from 450 in 2023 and 444 in 2022[102] - The average number of Registered Users per Installed Customer grew to approximately 24.7 million as of December 31, 2024, up from 22.0 million in 2023 and 21.1 million in 2022[103] Revenue Metrics - The company's net revenue retention rate was 109% for the year ended December 31, 2024, compared to 108% in 2023 and 110% in 2022[104] - The subscription net revenue retention rate was 114% for the year ended December 31, 2024, compared to 112% in 2023 and 115% in 2022[104] - Subscription Annual Recurring Revenue (ARR) was $681.9 million, $593.9 million, and $500.9 million for the years ended December 31, 2024, 2023, and 2022, respectively, with a March 31, 2025 figure of $702.4 million compared to $615.1 million as of March 31, 2024[106] - Total ARR was $824.2 million, $734.8 million, and $655.2 million for the years ended December 31, 2024, 2023, and 2022, respectively, with a March 31, 2025 figure of $846.6 million compared to $761.0 million as of March 31, 2024[106] - Annual revenue churn was 4.4%, 6.1%, and 6.3% for the years ended December 31, 2024, 2023, and 2022, respectively[107] Financial Performance - Revenues increased by $24.2 million, or 14.6%, from $165.5 million in Q1 2024 to $189.7 million in Q1 2025, primarily driven by an $23.9 million increase in subscription revenue[135] - Cost of revenues rose by $5.5 million, or 6.6%, from $83.3 million in Q1 2024 to $88.7 million in Q1 2025, mainly due to a $3.5 million increase in personnel costs[137] - Gross profit margin improved to 53.2% in Q1 2025 from 49.7% in Q1 2024, reflecting better cost management[133] - Operating expenses increased by $2.4 million, or 2.5%, from $96.4 million in Q1 2024 to $98.8 million in Q1 2025, but decreased as a percentage of revenues from 58.3% to 52.1%[131][133] - Net income for Q1 2025 was $4.8 million, compared to a net loss of $13.8 million in Q1 2024, indicating a significant turnaround[131] Investment and Strategic Direction - The company continues to invest in expanding its digital banking platform and plans to pursue strategic acquisitions to enhance its offerings[95] - The company aims to enhance operational efficiencies and revenue growth through investments in technology and customer engagement strategies[93] - The company plans to invest in implementation and customer support teams to drive future efficiency and support growth[138] Economic and Market Conditions - The financial services industry is undergoing significant transformation, with increasing demand for digital solutions from financial institutions and FinTechs[91] - The recent imposition of tariffs has introduced uncertainty into the global trade environment, which may indirectly affect the company's operations[98] - The company monitors economic conditions and their potential impacts on its business and the financial services industry[100] - Inflation has not had a direct material effect on the company's business or financial condition[170] - The company may face challenges in offsetting higher costs due to inflation through price increases[170] Operational Metrics - Non-GAAP operating income for the three months ended March 31, 2025, was $32.7 million compared to $18.1 million for the same period in 2024[110] - Adjusted EBITDA for the three months ended March 31, 2025, was $40.7 million compared to $25.2 million for the same period in 2024[114] - The company emphasizes usage-based revenue, recognizing it as incurred, rather than relying solely on contracted minimum revenues[118] - The company does not include revenue from professional services or other non-recurring sources in Total ARR[106] Cash Flow and Liquidity - Net cash provided by operating activities was $43.5 million in Q1 2025, compared to $13.4 million in Q1 2024, with net income of $4.8 million and non-cash adjustments of $40.4 million[153] - Net cash used in investing activities was $19.5 million in Q1 2025, consisting of $34.0 million for purchases of investments and $4.9 million for capitalized software development costs[156] - Net cash provided by financing activities was $0.5 million in Q1 2025, primarily from cash received from exercises of stock options[159] - As of March 31, 2025, the company had cash, cash equivalents, and investments totaling $486.0 million, with adequate liquidity to meet cash requirements for the next twelve months[150] Risk Management - As of March 31, 2025, there were no material changes in quantitative and qualitative market risks compared to the previous fiscal year[167] - The most significant currency exposures include the Indian rupee, Mexican peso, Canadian dollar, Australian dollar, and British pound[168] - The company does not believe it has significant exposure to foreign currency exchange risks due to low payment volumes through foreign subsidiaries[168] - The company currently does not use derivative financial instruments to mitigate foreign currency exchange risks but may consider hedging in the future[169]

Exhibit 99.1 FOR IMMEDIATE RELEASE Q2 Holdings, Inc. Announces First Quarter 2025 Financial Results AUSTIN, Texas (May 7, 2025)—Q2 Holdings, Inc. (NYSE: QTWO), a leading provider of digital transformation solutions for financial services, today announced results for its first quarter ending March 31, 2025. GAAP Results for the First Quarter 2025 Non-GAAP Results for the First Quarter 2025 For a reconciliation of our GAAP to non-GAAP results, please see the tables below. "We delivered strong results to start ...

Financial Performance - Revenue for Q1 2025 reached $189.7 million, a 15% increase compared to $165.5 million in Q1 2024[8] - Adjusted EBITDA for Q1 2025 was $40.7 million, representing a 61% increase from $25.2 million in Q1 2024[8] - Adjusted EBITDA margin was 21%, compared to 15.2% in the same period last year[7, 32] - Net income for Q1 2025 was $4.8 million, a significant improvement from a loss of $13.8 million in Q1 2024[8] - Subscription Annualized Recurring Revenue (ARR) grew by 14% year-over-year, reaching $702 million, up from $615 million in Q1 2024[11, 13] Backlog and RPO - Total committed backlog reached $2.3 billion, a 20% increase compared to Q1 2024[7, 11] - The company expects 54% of the $2.3 billion backlog to be recognized as revenue within the next 24 months[15] Customer Base - Banks constitute 64% of the customer base, while credit unions account for 25%[17] - Enterprise customers make up 10% of the customer base, Tier 1 customers 36%, Tier 2 customers 34%, and Tier 3 customers 10%[17] Financial Outlook - The company projects revenue between $776 million and $783 million for the full year 2025[19] - The company anticipates an adjusted EBITDA margin of approximately 22% for the full year 2025[18]