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Q2 Holdings (QTWO) Q4 Earnings Report Preview: What To Look For

StockStory - Tue Feb 20, 1:02AM CST

QTWO Cover Image

Banking software provider Q2 (NYSE:QTWO) will be reporting results tomorrow after market hours. Here's what to expect.

Last quarter Q2 Holdings reported revenues of $155 million, up 7.1% year on year, missing analyst expectations by 0.4%. It was a weaker quarter for the company, with a miss of analysts' revenue estimates. In addition, its full-year revenue guidance slightly missed Wall Street's estimates.

Is Q2 Holdings buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Q2 Holdings's revenue to grow 10.2% year on year to $161.5 million, in line with the 11.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.26 per share.

Q2 Holdings Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates four times over the last two years.

Looking at Q2 Holdings's peers in the vertical software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. PTC delivered top-line growth of 18.1% year on year, beating analyst estimates by 2.3% and Agilysys reported revenues up 21.3% year on year, exceeding estimates by 0.8%. PTC traded down 0.7% on the results, and Agilysys was up 0.3%.

Read our full analysis of PTC's results here and Agilysys's results here.

There has been positive sentiment among investors in the vertical software segment, with the stocks up on average 2.9% over the last month. Q2 Holdings is down 5% during the same time, and is heading into the earnings with analyst price target of $43.7, compared to share price of $42.52.

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