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Banking software provider Q2 (NYSE: QTWO)
will be reporting earnings tomorrow after the bell. Here’s what to expect.
Q2 Holdings beat analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $172.9 million, up 11.8% year on year. It was a strong quarter for the company, with an impressive beat of analysts’ billings and EBITDA estimates.
This quarter, analysts are expecting Q2 Holdings’s revenue to grow 11.9% year on year to $173.5 million, improving from the 7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.36 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Q2 Holdings has missed Wall Street’s revenue estimates three times over the last two years.
Looking at Q2 Holdings’s peers in the vertical software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Cadence delivered year-on-year revenue growth of 18.8%, beating analysts’ expectations by 2.9%, and Agilysys reported revenues up 16.5%, topping estimates by 1.1%. Cadence’s stock price was unchanged after the results, and Agilysys’s price followed a similar reaction.
There has been positive sentiment among investors in the vertical software segment, with share prices up 5.8% on average over the last month. Q2 Holdings is up 6.6% during the same time and is heading into earnings with an average analyst price target of $81.31 (compared to the current share price of $84.38).