QTWO - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 Holdings' First Quarter 2022 Financial Results Conference Call. [Operator Instructions] Thank you. I would now like to turn the call over to Josh Yankovich, Investor Relations. begin. please Sir,

Josh Yankovich

CEO; future Good performance Business Businesses, any This we on us Operator. With Important and can call you are Vice periodic materially forward-looking of Flake, with be prove included that statements factors to from the today. thank copies filed this on Web on subject and be Jonathan the CFO; QX Thank and our risks we significant our give with Price, results Development. regarding our results morning, first which correct. materially to will to SEC, those the no joining Executive yesterday of forward-looking quarterly contains XX-Q assurance to distributed or our Matt are respect statements for cause call are of may and discuss financial statements. call. Mehok, Form and financial from by quarter uncertainties, for the maybe subsequent in expectations expectations our release including our operating actual our the could Holdings. Actual and Investor Emerging our you, the President will site, in filings, differ the filed reflected today that week, of those afternoon everyone, reports such report David Corporate for to our section XXXX Relations press results found me of these forward-looking statements and And including differ that forward-looking contemplated conference

of this a statements financial Relations the the remain update most no Also, use X-K measures we which be date basis. included the of be unless this stated, comparable in time, discussion SEC later will discussed may financial assume on make operative afternoon. non-GAAP we assumptions on in is statements our the not at and otherwise release, GAAP call. any statements call undertake section Web as will on are of to a these call A should measures Investors we based discussed forward-looking to yesterday on that Forward-looking that press with site discussed. all such obligation why the measures on this and filed reconciliation found non-GAAP a non-GAAP our and our Form measures of in Investor only

Matt. Let to turn call over me now the

Matt Flake

Thanks, sharing our into I'll first results call Josh. over In hand business. the then then will revenue emerging Jonathan insights up million, quarter, our David sequentially. provide to in today's generated and by from financial XX% results $XXX.X first more of highlights businesses. X% and I'll quarter more discuss to detail. year-over-year, start across it non-GAAP the we the

XXX,XXX increase That to resulting up million our approximately We X%. also registered $XX.X total users added to digital of a platform the during over in year-over-year quarter, banking users. brings

Our QX exemplified results many encouraging themes.

win, First, a with solid we teams. across those pleased loan of in choosing QX of lending. We institutions we and deals signed pricing Tier execution as four and to our banking across the our variety across selected We're breadth X both of deals deals enterprise well the solutions, products saw continue with being deals. sales a the two diversity

detail discuss range deals which launched Jonathan exciting Helix, we shortly. a and banking provider, to digital key growing a as had customers with partner the new a Studio program win banking cited to our strong an new from we and rapid our of quarter. leading broad differentiator QX verticals, of was first solution, net And more see also majority in a wins. businesses of emerging Innovation bitcoin the vast with NYDIG, across as continue continued adoption our will Our And in ecosystem. we service a new all

analysts. industry product Our by innovation continues also recognized leading to be

named IDC Innovation a driver digital Studio their our quarter, as a banking referencing ranking. MarketScape platforms, key in QX of the North for customer IDC leader experience American This

our with the strategy in the believe product our frontier pleased from hard engineering financial the services, were work new in we our supports and sales and quarter, of performance While talented vision we product third-party this acknowledgement highlights teams. type of and

these exemplifying sales further X I'd environment improved, We like solutions. and second the demand the in enterprise is in segment new with segments the succeeding to lending new another in multiple customers. our enterprise strong in with we're in quarter a With quarter net more and This had that demand themes for row walk into wins, has mind, quarter Tier in the our through wins the detail. converting enterprise

in deals top-XX help as sees quarter bankers with enable tools serve actionable, them to in-the-moment enhance our enterprise insights, a and way and clients. staff, valuable loan bank. our of bank pricing efficiency experience commercial was the U.S. better a One of their the This their their with

we've solution, CRM from and customers we ability key base With enterprise our these solutions the and seamlessly technology's more make in we time. have reason across of because with to Our largest to relationships enterprise And critical lenders. recommendations revenue ability our loan The years. customers, loan prospects of deal. in the an recurring a we've the contracted was average than systems, commercial real-time some our pricing size our pricing to other expand over customer first use to the more customers won lending engine have the is doubled two they like strength value a our the their significant becomes. the integrate as to data demonstrated more effective said data And past,

enterprise accounts are in booking. while in of capacity. all over billion initial have Canadian now these North capabilities American banks a QX, the using banks, largest the So, loan $XXX We beyond represents including opportunity roughly using which is substantial one expansion some half each pricing assets five believe significant, our we landing

existing which position enterprise example the the to X an selling to expect of favorable banking of our we one business. customers, QX our is to another motion with solution was the which puts quarter relationships of customer. other X Tier digital loan strategic an shifted Another Tier force our our importance entire areas portfolio, of us virtually in of This recently see cross-sale over origination to of from activity deals the enabled time. having this in our sell a is more cross-sell sales to into expansion the just And

We also in had we X Tier Tier on customers digital the Tier a side, the banks Tier also continue solid those X three quarter net to wins, X quarter. add new Complementing X segments. signing the in and X banking

banking upgrade wide We're in credit market. choosing platform, of over from business a are an the to to a QX's a widespread the of underscores banking financial part platform and trend technology digital the share a signing accelerated banking digital financial institutions of specific the digital by variety kinds Xs refresh progressive through pandemic. retail institutions unions, the success a our X, To premium looking I'd as broad-based emerging sense Tiers of better few across Our that give like few quarter. from past quarters. wins commercial to banking

of around their of using with growth in business. the the And great our invested financial this believe selected and we bank is of to this One quarter. They given partnership is, institution grow win strong through QX how QX I a progressive a Studio. for we our to Innovation the user both banking digital testament single-platform retail is experience, flexibility approach in strength and strategically commercial architecture, signed a, centered example their billion provide roughly, $XX was a This X fintech technology to strategy a that's progressive business. deals bank the heavily Tier

Our second Tier win X also unique. was

on the be digital acquired than our non-QX actually on combined As in a during rolls an win existing banking tend M&A QX on technology. their acquiring banking the institution to system, across digital recent adopt and quarter, was online bank QX of legacy a Rather customer banking we've a can customer the to acquiring emerge entity from acquired shared rolling acquiring benefit where But customers quarters, the to platform entity. which evaluated the the their institution by scenario typically frequently transactions, chose Tier the as QX entire X to we had side our the bank.

Given win. bank proud acquired endorsement I'm how least solutions; legacy adopt the a path their of acquiring atypical platform. the bank, it in technology long-term strategic, strong this choosing keeping of made to really a system, the for than an and institution is Rather our of resistance QX's of the investment

decision. We at also to QX the banking success continue as of Tier in had X X we and more see include digital their time the segments customers products

fraud quarter solutions. digital adopted largest from only the perspective our came fact, banking digital also marketing the institution a management, banking, that Tier a from and X from deal but In not intelligence onboarding, bookings

multiple the of digital attached levels. who leverage over year, of our a to us space. to in just we interest ClickSWITCH valuable the are with has drive the one-year Finally, to anniversary we're been to from land deals looking product on ClickSWITCH clients to also customers. sales net and performance accounts cross seeing impressive ClickSWITCH and majority acquisition, solution, banking has particularly new enterprise a new past the their a ClickSWITCH help be proven standalone as fintechs, We've primacy

ClickSWITCH bank, the several time. During Tier expand look will a important along relationships top-XX we with deals, U.S. to signed we X that quarter, first over all

priority one we seen believe in QX of time. comprised the serving are broad and have institutions institutions a clients, over single Catalyst, that those Yesterday, lending modernizing the onboarding strategic is the ourselves banking as invest help from increasing QX actively commercial our relationships partner With as set, to deals relationship, Catalyst, from looking As winning and to banking commercial capabilities. financial of quarter financial commercial we we opportunities demonstrates, experience. And banking an a mix for positioning and digitize technology. area growing the solution new we're new announced to

them us as banking combined value While Catalyst, and established lending. we market, will powerful a for with set unique market be integration like onboarding, pricing, solution digital in corporate loan QX in commercial believe already are to treasury taking differentiator the products the and within banking a

some Jonathan I that, into believe year. couple sales hand over started of updates continued I over the way Before with share for revenue business, demand our that to we with our you of environment call when to improve. businesses, robust I'll to Thank And The reiterate are heading the are reacceleration has and the you. the XXXX, the want solution from across still how well-positioned Jonathan. with we set all the emerging hand exiting growth call we to and pleased And broad execution we XXXX. lines

Jonathan Price

banking Innovation be growing a financial growing end customers driver every Studio, contributing in of cited winning as and relationship the number Thanks, of closer of opportunity. Matt. digital the the last digital Studio. because year, least QX exciting, QX broadly the deals building choose perspective. our launched net Studio now to new are with extending fintech formally decision our both the in as And partner those the and Innovation institutions own Innovation and QX. digital with our continues of their via And banking Studio than And already revenue deals. Innovation customer use of of financial continue More We using Studio, greater Innovation and XX% I'll their resources. at in June, to partnering more one believe see Studio to program, quarter, institutions a a with key in half the banking solutions have digital more Innovation utilizing programs. where quarter start the This factor Studio long-term their platform customers is included we of we specifically our from our the QX first and becomes, programs than net Innovation we and marketplace it new demand

early of ecosystem, financial out channel that customers, believe to customers innovation stages by strategic we rather of number is and our This the as revenue to quarter. beginning in growing we're are we new benefit a the working in create the driving will ecosystem with while institutions for seeing And drive a our partner to meaningful also in their rapidly from. We a share is opportunities of for and that than And just partner, total providing compelling the partners the this economic value just ability adoption are revenue solutions vendor. are these strengthen value encouraging, our distribution case to a XX% sources these new building that introduce of revenue grew opportunities. position validation rapid proposition end-users, and

key several to Moving quarter. Helix, the business had also this highlights in

economic range We continue opportunity new one with deal relationship. associated sign a across the to of largest extending our partnership this and different customers, verticals, of a customers with growing our landed effectively from and new

bitcoin leading a NYDIG, with program strategic company. a launched also We

we convert As platform payroll when Bitcoin a Plan, through power Helix their in leveraging Savings of offering called program benefit discussed, bitcoin offered their Savings Plan range program is off XXXX, enables we auto to The to with won the of to second of Bitcoin new portion is industries. of quarter start transaction a deal employees employers. our this exciting US NYDIG wide no from participating an a companies fees. paycheck with to employers

go-to-market unique of and experience, the of Helix the important we are with employers relationships. in the of client this the milestones they optimistic communicated NYDIG's user consider the partner potential this relationship grow unlocking in Given we And to substantially time. over launches value as in program model, which past, we about simplicity

programs. about for a launch. program momentum. excited new Helix, long-term year like recent launching to quarter Helix acceleration client an verticals, our entering existing we and of pipeline, you. new lift Our adoption solutions our and relationships, the And have the potential ahead financials. I David the related XXXX, for the Thank extending typically that, year from into with clients revenue marketing over are to user I discuss pass with the signing minimum and I'm growth, a rebrand, major with to state believe And with call for following remainder great One significant to would upside and of entering our

David Mehok

our subscription our that I'll Thanks, pay we began and go high-end and for was second primarily total revenue The in in guidance of full-year customer the quarter driven or slowdown organic revenue conclude with previous Transactional and to demand, EBITDA sequentially. the XXXX, and Jonathan. first was growth our for of represented on increase in lives due user the within with in non-GAAP increase revenue an slight quarter. in sequential grew customer by with was fell and is quarter. $XXX.X by quarter, that Transactional first solutions. XX% lending last new volume the Sequential Annualized second-half a lives revenue. well guidance digital from and up revenue increase and for range. new from and In the prior a of XXXX. year-over-year by quarter year, within year revenue cross an revenue the quarter generated resulting growth XX% net Total during as overachievement total X% results reviewing sequential the million, the from dollars to XX% the service-based built year-over-year for ARR that recurring decline revenue driven had by XX% new growth increase $XXX.X consistent relative to guidance our the year-over-year our quarter updated begin growth. space, year-over-year Helix in exceeded traditional The bookings of The quarter, as strong primarily down the bill the sales. million, was momentum period, up guidance, of sequentially. of revenue, go X% for and also

sequential also the from transactions. benefited users driven from solutions, quarter growth and revenue our in increased addition, by in usage-based Helix growth In the

net increases As seasonally we increase result both new have some revenue well customers, billion approximately a previously We approximately The the year-over-year quarter bookings to through sequential XXXX. usage-based of with in of of customers backlog and existing mentioned, the X% exhibited as added was backlog, the year-over-year, in second-half $XX opportunities renewal in in largely tax an Helix increase of decline million. as concentrated bookings our season. with related ended larger $X.X

backlog the call, I quarter second our earnings remain renewal year. which far opportunities, the before in sequential opportunities the QX in target second-half of in last will growth. In target As lower renewal improving impacted had mentioned in quarter's fewer

continue of sales the remainder for the of a the performance will quarter, As pipeline to the well result observed strong growth we year-over-year believe strong of have during as backlog full-year we the the for XXXX. as year,

for slightly consider of decline recognition quarter an our the the sales, and accelerated on from of the previous primarily we Over to of incremental indicator, an previous to The revenue and $XXX.X million claims, run of investments payout the model. into that will limited operating were $X increase We first was due revenue increased of the people time, million, quarter incremental we lower across year-over-year which XX.X% first the increased and in fourth Helix largely up at driven approximately predominantly continue million, within $XX.X margin increase benefits. was believe for an first expenses long-term the medical associated used Gross compared within which quarter several associated addition quarter Hiring primarily increased The booking was also, by an net margin with of an timing $X.X in was a and or run As naming to million the of hiring headcount, for both to our accelerated increase stadium payroll in in down quarter second the of headcount, R&D ramp to taxes, XXXX, million, to were XXXX, increase gross reflecting as backlog marketing, in for specifically XX.X% being revenue, which $XX.X sequential payroll Cash hiring more operations down the associated down of million year given driven incremental for increase the we and our mix used commentary usage-based of quarter expectations year-over-year cash. margin a observing. and in of wins the $X.X in costs, rate expenses Austin-based the incremental usage-based shift to our overage opened in key XXXX. in facility in annual an back-half commitments, first employee-related was accretive by will $XX.X approximately in one-time $XXX.X growth above the the we Total And expenses. quarter, forward-looking indicators costs, believe of we The important down and Both first marketing including revenue gross as towards seasonality, of with of margin costs benefits impact expenses concentrated expenses from quarter and significantly, bonus an the our pass-through were support have the XX.X% the fees opportunities. XX.X%, was quarter operating and was of the million in to during or ARR our $X.X additional or delivery bookings million, in rising total, mentioned, resources position XX.X% margin fourth associated million, XX% in that and contractual decline revenue seasonal cost hiring quarters expenses of the the revenue. of revenue we to in percent rights, attributable and and of The business. being is cash in wins mix to important when Sequential to benefits, backlog with due and in XX.X% resulted with quarter, expenses, In quarter. with and limitations ARR the associated year. $XX.X pace intended as strong with new million, of and last as within renewals, revenue cost our timing operating by feel $X.X was equivalents, illustrates previous for first and quarter which of an provides of a to performance a business XXXX. from cash, related bolometer to quarter, our we within these picture driven conjunction portion in as business quarter. the XXXX, related and the incurred quarter. of demand for end fees. provides evolves. new million of And financial be a the from holistic in are mix and predominantly EBITDA revenue, remaining in which previously the indicators about business bookings the with ended Adjusted sales incurred benefits sequentially critical resources hiring year-over-year. well drive

$X.X In quarter $XX.X and the million, addition, flow capital in generated cash we incurred free negative million. net expenditures of of

Let of me updated quarter our $XXX and second to revenue up second $XXX.X wrap We by forecast full-year million non-GAAP million. quarter range sharing guidance. the in

our to of We the guide to representing of growth full-year million, XX%. range $XXX.X revenue year-over-year are $XXX.X raising non-GAAP XX% to million

we expansion EBITDA $X.X second As representing XXXX rates the the mentioned, X% to in and growth million, believe revenue in T&E. in million, year-over-year new we confident increased year, EBITDA million first-half previously for positioned observed ramp $X.X $XX.X We and for higher the exiting XXXX year associated EBITDA than in annual we be pace adjusted remain that to to quarter the an and of adjusted with we're higher hiring revenue growth forecasting our will full be of employees adjusted of XXXX. second million quarter those rate $XX.X will costs of continued The non-GAAP reflects year. a revenue X% forecast

revenue with we second-half positioned turn had year, to our deliver to with of an well a guidance Matt margin into solid will expanding that, believe second-half the back summary, by expect acceleration of and 'XX closing profile. and for over year, contemplated coincide the the In margin We to ourselves the growth the revenue call the accelerated expansion. of in I'll remarks. his XXXX, in on we've start With

Matt Flake

the client banks roster, better, helping that continue goes sizes profitable into solutions, of our success biggest add space Thanks, performance solutions some in business upmarket the which produces make had broad-based to saw and pricing up move with first across David. and we traction substantial pleased our loans. in loan execution. as our turn in more I'm all institutions the to back enterprise help substantial ongoing quarter, We where world's financial In data the closing, of our

expanding mix relationships, of digital had banking diverse wins broad in a adopted customers both existing that new three Tier side, X we wins, and new of by a products. landing net highlighted the On set

revenue turn innings bring a Our the traction NYDIG, we you. strong we perspective, the With new to time. which our substantially expect And over positioned It's uniquely with we're a broad-based also frontier continued leading financial verticals, while and effect various fintech add emerging from had customers and we driving to unions, partners, Innovation the over the to program grow net deals, partnering our And quarter. credit with Thank our still from to businesses helping demonstrates in Helix, world-class new Studio. I'll it us QX by believe brands. operator why recent beginning execution, questions. customers. to deeper and for facilitate a to services long-term business. believe win opportunity early see can it's with that, attracting the demonstrates flywheel Innovation with Studio with new fintechs, banks, it and with And pleased we're launched engagement We're

Operator

Alex Thank Sklar Raymond you. Please from your go [Operator Instructions] James. is Our question open. from line first comes ahead,

Alex Sklar

the thanks. you've what accelerated any market, in displacing your few upmarket quarters. compares lending since the seeing been digital Matt, enterprise Thanks. Great, curious, changes over you're activity are banking the the the IPO. Tier that probably of and for and offerings? now, and seems how of they've I'm across terms while time a moving past in X the you But

Matt Flake

$X that customers. more upmarket, customers momentum also digital great banking I XX of and have more size, and above, to XX think continued we've than Yes, got digital we've than billion lending Alex. thanks, Yes,

think, then put I extent, breaks on in they fire 'XX. earlier, the harder some they pandemic the it had to and during back to up

has in to the come area obviously. life, So, back that decision-making

PrecisionLender, obviously, three straight and couple straight deals quarters think Xs. I quarters a of with banking, got with we've digital enterprise Tier

I is now, are matter importance of their right seeing a the that's and more activity. they this the list you're -- pandemic of the as at around of, think the where it's out for top business digitizing come them they

matches do. they're our very nicely what trying So, with to solution set up

are customers reference sizes to to able shapes that similar are base customer and off other them. Our

is within just network that expansion And digital there's And these occurs. so, tremendous, -- it's or it's opportunities lending a customers the for whether banking. effect

in we're to So, quarter of the back-half all look big those cylinders I a on hitting year. second and it's forward -- in areas, the

I its on digital year should be the think that enterprise enterprise to the them. the but year, on have you'll breath back-half of a good lending side the probably see for catch side, it

what we're business. make as of we Xs. see about digital not seeing focused at you'll highlight than by transformation some can deals the because and these encouraged an itself line translate talking a billion And larger if digital begin bigger upmarket. were on also, have Tier a you bigger solutions. now, to deals are But just that's $X two sales think is point MRR think that's the that I'd upmarket that what's And had decision, banking they that X of you're Tier to I really is And happening well. leading that what banks perspective below I not just on size, not of So, out from force the

well. as we'll see So, increase ASPs continue to

pipeline, some Tier but feel of where So, X in really economic well pandemic. about issues, just really performance Tier X. there upmarket in solid obviously, the as are -- good We've we in are the bigger coming and out as

Alex Sklar

the like That's great of in on the 'XX. terms And past kind curious the going seen how Got you've level color. a I'm it. sounds feel just the some XXXX? on comfort expressed into for in it quarters, growth of you we've acceleration in of follow-up comfort two David, ARR acceleration back-half XX% quick based over

David Mehok

Yes, talked size one And disclosed, things of of of some start year, again to acceleration. of at Alex, we relative good winning. the repeated is the the in feel the about then we're opportunities both terms we what of still at and Investor the Day, that the we've

last opportunities, Tier nine won seven the months, six Over enterprise we've opportunities. X

and But be we're because longer P&L. in keep to manifest to that's is late-year mind, take see that those the going excited to into solutions. fantastic, All implement of that stuff it does

talking to QX, that end in about we've occur and QX, to then start see been into that ramp acceleration going really of 'XX. you're So, FY that

Alex Sklar

great. all. you, Okay, Thank

Matt Flake

thanks, Yes, Alex.

Operator

Terry ahead, open. Our your comes Truist is line next from from question go Please Securities. Tillman

Unidentified Analyst

is Great. Morning, Terry. [Ph] for on Thanks This My one questions. [Robert] everyone. first is for on the Helix. taking

point, programs a in as improved, could becoming a get this five about of launched, three the I growth at has service same? to And long-term that stand trajectory and there's over lot more next again years, Thanks. one had banking the changed, an a or we out update been follow-up. any So, customers, lot material? any And the then visibility on of or

Jonathan Price

And it's like tax think big opportunities credit, the held transact and the launched. users with see we've what by Helix. proliferation Yes, the sensitive and some Jonathan, season, a of to just we've talked share these one, I can clients to take and we've But on with name-by-name a and about I things things engage them cards, about little these debit multiple seen like We're lead basis. end-users on we first accounts the of that like.

and meaningful largely these And they quarter events seen that do like and excited again engage second big so so, clients here by and we with to in first have users, marketing far, multiple other we're tax often incentives. try driven they're what offering about the season super that we've and sprints

the a innovative work host of names perspective, now excited one and from just excited a on I very that payroll just launching NYDIG And so, we're to And that U.S. and about with talked we team. the think opportunity about. bitcoin obviously, we been that with employers, there's a that's are

we accretive sort Investor big comment overall on XXXX, of of you as I And be so a we our growth but Day, $XXX business leading as is to David, a can think company. growth, too we the target, million And, lots long-range this opportunities. going north believe shared of that shared the into rate at to highly So, [indiscernible].

David Mehok

we're volumes years Jonathan one things And drive accelerated Robert, the because models [technical so growth over for ramp minimums an bit right. unique economic about feel out with to feel growth. that's [Ph] overall there's as But that at Yes, recurring that required that is to to difficulty] lower these that really business with modeling out, we're it's start lower the but based occur good accretive that said, of is it. of remember, And how going [four] terms means more positioned in associated because, we're upon next our to certainly comfortable looking we're these, this we the transactional model be quickly. how that a seeing business. the that it little pretty revenue, rate

Unidentified Analyst

That's Catalyst, point? how great, meaningful that move X more too Tier on or growth needle appreciate the one at follow-up And this just to in end early could being? could Thanks. the Tier had or quick up Catalyst X tell And color. then

Matt Flake

the for question. thanks Yes,

that the with of banking on loan helping pricing is ability do extremely Catalyst. then that pricing We and services, banks And SMB the customers a are, bank. unique for onboarding relationship, sell process the both that offers offering and so a with the digital And out open become a obviously, customer accounts, about demos, QX then, a and the our customer, and unions comes your a then work customer help digital platform a to, on new challenge then which and side. things. growing credit sign is at lending business business how these the real depositor ultimately up digitize to commercial business or serve the both moving unified on technology banking side then which you origination, treasury acquisition when you delay tailored the important are borrower real somebody digital or focusing to of It's relationship, the excited to them the to

So, have tier. not to it a specific it's doesn't a --

a be they highly on Catalyst that with were folks for large out differentiated. Tier said QX several I the customers could yesterday, they us You that Tier -- X financial it. soon a Tier reports, is got institution, but their talking that as want X, X Tier get hands a from can X, as this

culmination work of lot PrecisionLender, digital to on over that about So, last a grow. for There's it. game a think from it's lot and the gone if teams three with of the you assets years, and it, acquired also we've the changer the banking us then four marketplace. the product it's that to a built of cloud have And lending,

And excited it. really we're about so,

what be do I'm mission out communities. or business the their work to proud to how credit matter bank of game going you And fulfills of really our and are, our to changer no I that's it' be their think able for of think And customers I union us. real strengthen come help this. build this a

excited So, about it. we're

Unidentified Analyst

Thanks so That's excellent. much.

Matt Flake

Thanks. Appreciate it, Robert.

Operator

Our next question Citibank. comes go from from Please Schmidt Andrew ahead.

Your line is open.

Andrew Schmidt

geopolitical little was puts year a Hey, bit from up hearing up what there you going guys. see in Obviously demand. and That's are a more takes point, this about health with you but positive, your a financial perspective? hoping continued to uncertainty, point. starting impacted conversation mortgage step institutions? a in it questions maybe is Thanks volumes, just great obviously lot. and for just maybe you FIs a curious terms On Thanks from could talk taking my of the know, I interest few overall, on health rates the obviously that

Matt Flake

never of about set, that a in up, thanks, our or hit hit, rates mortgage -- of opine to kind interest rate President out They are if trade-off the with it point, large Yes, me you that, happen economy, a I'm written the rising have small going talked solution I in lending XX% are think PrecisionLender and bank the the environment. going or but of Texas, a of the but going -- really not obviously tool, is I there, told a they're but taken business -- the Andrew. your to consumer our on bank the loan the here has to business really lenders what's think he the and hasn't

written in situation. loan have to log than a are a rate the digital on a price we a where environment, in a that into our that the billion application think first you I PrecisionLender digital, The tool need in play. we ins So, volumes quarter. rising XX% of that's more And had comes lenders loan help you on never seeing

that and ahead, able with of serve be transactions. ways more are is going those it center environment, make systems unprecedented, the they were of the seeing if them economic may to to tough customers about what their it's them is not people. allow that at that a profitability, volume we is these So, do amount And if to drive in going efficient, digital is think to you

our and we lines these to at Catalyst, they opportunity top want are like mind, direct bring set momentum the talked conversations really with the to and all like with move and well their the people Jonathan side an the their customer's So, about are and now, of this things account right on ClickSWITCH, then with deposit Helix PrecisionLender the simplify center people, having live solution allowing and them, are business. we need, obviously the of they products QX of products want the

to happen, think trade. what's really in to we either So, going knows be who side that of are I going on a good but position

Andrew Schmidt

Thanks for point That's that. about pricing loan that, Matt. a Thank solutions. you great for

a you the called ability In and obviously just of benefits, potential like about talk targets, that? just I hiring what retention to maybe in year, David, fees, largely quarter; and are the looks terms cost still able the offset for and impacts manage there's are, inflation like few out but things the to cost et moving ongoing in inflation, our environment, and think Thanks lot. that you then a cetera, offsets the

David Mehok

And lot going actually way terms are those into sort Yes, in our of we coming benefits. we guidance the spike our one guidance we'll don't those we that's that later the Then have have this in that and see is the into something unknowns we but that a QX not know. our year. the we I those to And full-year. like be we're the categorized done hire continue and do fairly unknowns, for did resources, will sort for ability see a to opportunities for factor of only that QX, get QX, the hiring And is that's live of about quarter, Andrew. that of of things what our we per good things we increased and in in feeling that have there forecast in to and confident that and taken know, month in year, in QX. sure, these trying We last the -- the costs larger basis. up that know, just what taken in think -- up this original And had the upon for that is saw post we've above up, do expect but expect forward we our full-year up up we the disposal we've slightly still were forecast, we see going going to travel that use above modeling based like per as data ramp forecast, below ramp is again, employee know to Omicron, QX that's Then the And seen of liability. we to in it T&E, March, the we the there we is and things be for the that a we then we to we've that in rest we that opening year. continue the

about And place the those always full-year offset that's of on we measures have that working we on, point, to we that deliver your that. feel allow EBITDA the are executing and we we're the So, to the And to are in to that good to try guidance. really things offsetting incorporated. in us provided efficiency some of areas right are all and across organization, those

Andrew Schmidt

you very Thank appreciate comments. it. the Got much, David,

David Mehok

Andrew. Thanks,

Operator

Our Lane go from next ahead. from Parker Stifel. comes question Please

is line Your open.

Parker Lane

the Yes, hi. taking on Thanks for question, the quarter. and congrats

sort the solve field Just and as scale the next circle years more of of whole of what particular, wanted until and on few how back efficiency efficiency, more launch and in out expensive fullback? ability portfolio has Catalyst to of the team QX the to that the the with team the goes had does the over impact recently

Matt Flake

Yes.

we launched roll been out, it lot product of customers, with lot QX we been had Catalyst time a reports any but customers. spent yesterday, have talking we of about So, a

that with whether problems them. the on our onboarding, onboarding partnership deal facing, solve customers, winning it's or serving trying it to with the landed growing we they're in and initially -- think I and the

efficiency And position a where it's deals that enterprise whether in we billion lead to product our above banking we be will selling and lending $X our go sales, digital I a in really another deal perspective, XX we counts I to you there lift customers, So, accounts pipe direction the out fuel are we great. ability and in about surface help to pipeline, it's are them, whether in -- rates able going are pitching the the how existing net in and new to growth the those then for the with deal plus close motion assets, hundred have, that more digital is that go points puts everything XXX and customers, we right business than tremendous expand know, is whether going From transformation can it we people on the side, going it's hundreds think digital long-term. are impact to have And us. back continue to then, earlier differentiated. right it's various in have more the then the us with generating products, talked whatever -- now, or to up, win in of products, it's this opportunities proof to the around more of know, offerings, it's area to you do launched that trending our this the us back had for that the

banking, how how point having go how out you about earlier, opportunities talk show mentioned we digital beginning there. a and to against that our see want -- the to segment are ASPs broader those X Tier by I onboarding, and that all up are in let's talk to the talk broadening digitize and you you want digitize compete X to lending, out reps about you digitize all let's products; As conversation, are things about favorably solutions, and are having Tier

as group work optimistic speed, to heavy of in get them, lot lifting, and forward. and a of a pipe very we lot but they're train up to continuing and and are doing look them invest about So, the we that

Parker Lane

the quarter then, backdrop out playing potential perspective, Is a And is macro impacted here the bookings out sort how of there the labor being inflation And and an the condition? sense. makes called year. from that it, in of real-time? of back-half that sort of your Got in strong slowdown last you by because current

Matt Flake

of to had lives, fewer think talking Parker, up lives way last -- see I about going the continued in pick fourth started up to then and the think a pandemic all begin bookings you of quarter. late are the through in we quarters the -- in had back-half go go pick in are Yes, I obviously we year the five has first momentum year, the the quarter quarter and from the the to you of it third pipe we

saw So, on maybe are a there there, was a -- is little end digital a lot up users obviously lending, XXX,XXX banking, Helix put of accounts to we miscommunication but or growth we something. million in banking

should coming So, we you us everything having a year the -- this bookings, the aware. you well see quarters are of into of that see together, snakes of is it's 'XX. the that matter back-half In we carries just momentum as pandemic from know, to five we got guys the through work

Parker Lane

it. the feedback. for Got Thanks

Matt Flake

Parker. Thanks,

Operator

question from Pete Davidson. Heckmann go D.A. next ahead. from Please comes Our

Your line open. is

Pete Heckmann

versus of maybe two? differ direct the morning. terms Hey, more on know, can bit pay quick revenue, transactional breakdown the those in that idea some kind whether -- or some there, a One the different traditional bill good of bank aggregated you revenue, be transactional one and coming the of growth between how things you us give of rate types of little Helix, bill from

Matt Flake

heading pass-through it the and drivers standpoint, decline is actually are well. services saw a Yes, majority line that's the transaction which why revenue transactional hitting there pay in other that Then of bill items year-over-year, as still the pay. you from Yes, at there Bill you remain transactional business did XX%. hi, some is Pete. have is other and

in pass-through the in that another the is filings, see when talking suppressed and are services transactional in So, biggest you filing. is you other does which do driver the the hit space, margins line the we there that that that's that about, in -- revenue

Pete Heckmann

would had the months the bank has updates that then, in some you Okay, acquirer, these XX all out terms still and say feel right. in given are the of terms customer the didn't in on in you past but you think the acquired, M&A of picking mergers? one I that that And you are coming past, but on average, most M&A, just up get happened pretty the surprise top you of are over like

Matt Flake

numbers, the -- can't you I description, QX I Yes, I a acquiring or I XX, David, XX side. don't -- had just remember on know we don't the mean were was it

David Mehok

That's right.

Matt Flake

is we XXX are you ones -- that part 'XX acquirer our the customers doing I in are correct, had were MOE. think of of or talking M&A acquisitions MOE, the -- the about the XXX; this numbers and the So, and still are we directionally

we have which and momentum their QX, we this towards going we So, -- just continue to and and XX so, or the client testament think environment. XX in growth the are really in acquired roster MOE, that how the is or approach to I compete a

we hope trend wouldn't. why certainly So, know any reason and that continues, I don't

Pete Heckmann

Great. Good thanks. year,

Matt Flake

Have Pete. a Thanks, great day.

Operator

go Our next question comes from Joe from Vruwink Baird. Please ahead.

Your line is open.

Joe Vruwink

it FY'XX, that to more how wanted And Maybe focus but on just back can the about does getting a into you environment, up play about for does what looking but way, to talk obviously commercial seeing a are if does go we call, on competitive sense? plans out you seem how broadly, everyone. hear a is stand priority morning, renewed pipeline? in the talking banks, the it investment from just investment in based up Catalyst kind that of of QX and solutions show Good Great. be your to lot broader

Matt Flake

looking they whether operating using banks commercial time, their to not that a of America obviously power experience, been get into have credit compete seen station PMC's just but investing just union long away as to the But the for that accounts, we to environments with the and lot digitizing we are we're solutions I really compete it's of business Yes, We've have on favorably in, that business, retail want a those side Bank seeing on commercial take interesting the they from technology. a things and Helix those it's lending, done things obviously the retail from a cities. are perspective, is focus the don't or in well. business of

than are and offer And we retail solution these they it's it's of business, pricing commercial, use that's beginning like to solutions, they is everything, incorporating ACH, the tax to for onboard package what a into just brining our broader which customers. an power and relationship, so, is even by perspective doing from not payments, unifying small what like to onboarding and accounting are a it's then tools the then the it's software customers, see products Innovation Studio we the Autobooks experience,

And data or a with our retail support across of phone integrations that to to they drive are one set so, with the of they of single the so one modern to things desktop, solutions, these log-ins, one system an consistent to solutions the the experience upgrade; have the a security breadth fact the or where in set us, customers. meaningful see those can tablet all of that, back-end, platform system tailwinds that for are drive the on include technology products administer, offering, banking digital you to sits as use mobile to for experience environment with the a one people customer, meaningful, or moving digitize even

we that competition, the the with the We talked technology think a going are in begin about to 'XX investments are that momentum we've to translate into beyond. in I see the unique against very back-half made differentiate and made decisions to of we've in position you the and ourselves and

Joe Vruwink

banks the coming any X, they're way, now, they and back maybe year? macro great. know, to a but clearly are concern do the economic guess, And of slower up, I there, slowing, what again, were with with Tier is you square then, or into that's out next leading bringing come with of a fact look, back, the that maybe some that spot transacting bit back, a maybe Okay, in expected you come now with particularly is that that they're to a put -- indicator regional things you X does of sizable when really now not Tier indication the for QX

Matt Flake

real So, up let clear that just quick. me

came then it longest the get were that the and fastest, the took them So, Xs to Tier offline back on. ones the

and engine hit going up, billion the we said, when institution, fire are the is larger it in them X took above and while So, a pandemic to stop this they get to 'XX back get they those. life commentary and from time, to smaller Tier X, approval because faster organizations, faster on they ago. down quarters back came X same many Tier shut but the The at can they're then

had us those for Tier digital opportunity opening the side what conditions and So, of talked X been lending digital about. up the banking because the on I

So, of environment, rate digital and digitizing digital lack experiences increased that -- the banking the rising consumers. importance experience of the for the the the commercial rate, in area, customers

So, I is -- proud macro tough if try not I get doing, think you're digitizing point I dictating business on the environment, something was how that efficiency is economy, I'm even making your is have I business. to of the out no it is but earlier the experience going a

amount the this And so, million, XX pick where up. users set are the to on almost businesses are And on the users probably actually two those continues of demand and proven application, have, we that's million solutions environment that more million also, that application. than maybe a of volume,

have, see continue banking the a move you're to think I that going at experience. we towards, So, pace to digitizing the

were on a think you views trade, think we thought market of was is actually my trade. got and QX -- one I me a things pandemic that the pontificating the I I reopening with wrong if think we're this here, but own they

as they care when in you of they were had. banking customers back digital, it that's see off, pick saw power that end client, were economy the making 'XX. their digital and started sure Our weaknesses healthy customers And and then that taking 'XX, pipeline focus while they on And reopened, everything had saw up, of momentum products to of QX they could. picked the our to the of they go QX doing the in the up But the QX.

where deal up, really the is being being going by momentum up, trade I'm and that in up. to pipeline we activity, And more area. reopening encouraged we're the the count, the are, activity see So, really the

business, to onboarding, acquisition, we're we where the of on today. that's the commercial, and And we whether think, retail, continue uniquely small data, positioned in side, us. market So, opportunity to capitalize lending, sit front deposit it's

Joe Vruwink

there. the for thanks Okay, it leave clarification, I'll Matt.

Matt Flake

Joe. Thanks,

David Mehok

Joe. Thanks,

Operator

is comes from go question next Please ahead, from Our VanVliet BTIG. your open. Matt line

Matt VanVliet

sort more might in some talk Studio of around customers Helix on what that with, about a especially maybe some nature. Jonathan out inclusive it. But Helix to built this some little is Hey, group for you've bit products, Matt, of them you good taking you also look and you've Innovation pontificate question. this, the relationships there, are you digital-only enterprise -- side, have newer kind of some on things -- interfaces, morning, go guys. as banking the these Thanks of but at the can between of touched gotten and the to we'll I'll to lending launching that back something get

you those five] that [Ph] of [off So, take type internally, pre-built some platform this is kind focus? can of of an stuff singular of really to they whole and more guys fintech or this are doing

Matt Flake

in why is have Jonathan me. this -- the have I'll Matt, I Yes, call with

you Jon, about that? don't talk So, why

Jonathan Price

advantages the core, the awareness mentioned. cost-effectively, at of they to a initiative that quickly to about FI target and and a frequently that because Yes. were I No, conversations see starting digital-only value And a that and digital-only think if cloud-based to our there speed interesting initiative. I the lot clients existing launch it's a right brings think timely advantages concept of have digital with strategic are point more, as is an differently think demographic and of more to we think more it opportunity. now very around banking We and the a we cost is a of a certainly that

differentiation has ability we're something the just the next-gen traditional perspective. definitely the challenged banking is bank's it Historically, what functionality from at. So, use these cores to and looking by that cloud-based allow understand cores a between been case for

we of working it's as that probably in up six, do through a ago. more head way it's coming it's the now, in back a and question a we're us now that wasn't towards think this good to XXXX. but into going up But open it because new XX market year, So, months for actually we

Matt VanVliet

outside the mentioned Thanks. international sold overall been And kind What's and Very Canada, maybe few from in products traction are those solutions of clear. presented? in you banks or terms some Canada, there? looking the of being being lending Matt, well? And of curious any the the larger a different How U.S. patterns as are markets then, they like? North decisions of the the large seeing but how buying outlook or of customers American-based you're than at what the are

Matt Flake

so Canada, We've on just Yes, top-five hiccup on up we've the pricing Canada. clarify, a or well open with all war. what bit a with -- tool the going in done based form fashion, Matt, little with use some so, on to of in banks really the our was Europe seen

picking up is I this would think or this back rates again. they raised morning Australia, have Asia again just been afternoon.

the banks these PrecisionLender, it's large use But globally finance So, an opportunity to us even customers comes we've to some and to within lending from you'll global see the and that these the begin spread expansion for perspective, so there. similar going over tools internationally, opportunity pricing extent. product, from talked are cloud have we about a That alt there. also dynamics that

with that in continue patient the So, in are of space, and say pick pretty business to I back-half group. year. with or this we'll would up been you'll see the international that invest that we -- consistent We've hopeful

the in we what them or doing. Europe, couple have a we're or that I think great and We investing. team a Australia to able Australia have weeks a team team on in is we're road were see focused to and month get out great The fired in the up, really so team ago we're a ago. on We

then be 'XX, have move our as Asia. we we in the into us all contemplated So, think with and Europe I this so our in when talk we of upside for -- And solutions nothing guidance about 'XX. it but should forward

Matt VanVliet

you, Thank very helpful. great. right, All

Matt Flake

Thanks, Matt.

David Mehok

Matt. Thanks,

Operator

Stanley. next Please Faucette from line Our comes Morgan question open. from James ahead, go is your

Unidentified Analyst

you've to my some made having various the the that comments Hi, conversations thanks related for It's quickly on just Michael wanted earlier were with on been to for I taking question. of touch FIs. that James.

like in I reengineer to tech sort in general, of there most So, or cetera? in acquisition is are in takeaway who bank who in, union this or and any is notable their seeing size, just stack, lean trying you terms to is of likely customer of guess, et environment credit terms

Matt Flake

behavioural occurs Yes, M&A union, of solutions who on if bank -- that law union, what the Michael, the management that success deals we've numbers group programs customers, built it. at marketplace, an retail and of a a help I up have team lot management pick where or new them products kind it's customer folks that them the all use business, data to it's want focus in a gather also the loan look of talked winning the say commercial the we've look we've either would through the our transactional you group to within at devices, is, the on the it's of gotten, and about we that. that the more that there to data, through who help that you data, attraction obviously And or whether our the customers our is it data business and ownership we then we help using growth team growing of a on launching occurs of customers through whether to through in on digitizing determine centre means system both it opportunities. base, expanding customers, had with new a organic or of credit credit At this deposits it's within and

to interest no so, new going they'll probably through going going the grow within And -- they institutions to growth M&A. customer as organic this marketplace, in base, to are win they're they're usually that by selling, grow and have viewing they're their in financial it's deals

going banks two that what of the lot do I a customers is $X And to that are next you translates of, end want our to the most see which to billion up think in the to winning three billion be. become you're are to those billion $X that years. people $X So, $XX million we where to is,

years to we banks. billion to seen, that's this business. going in billion to $XX But particular, since And the last billion over that the in $XX billion banks become $XX cadence You're honestly, public, we've XX see of $X went 'XX.

to So, to weapon, those continue long-term shield, we're the we winners a we in lean towards as we people approach because use to that and customers deals, think that's how and a win marketplace. and going technology the want this not they're

Unidentified Analyst

here Jonathan, upwards deals Innovation to a then XX%. of think the closer And inflected I Studio mentioned have it XX% differentiator, as last net new really to of memory. from seems to citing helpful. quarter it you Very number was And

that can dig seems in to driving factors biggest just differentiator big are a guess, into you the activity? It some I inflection? ERFB quickly So, pretty that be

Jonathan Price

it's you Matt to we selling you talking more the what mean I that conversations a business messaging than seeing Yes, prop that And sales bring broadens with think in you're ability wide. the from value beginning. the embed that into small banking about small aperture gate. really the through for new about, Like changes, with can motion think about our or again, what does when platform, value how talked consumers when the offering these with when go then business, the deeper. we're ever the mean, just just it and small now of I applications that the value net And and factor digital is it just the bank of application our really as beyond what more digital builds differentiating it helps proposition provide bring is cycle, this businesses, and out run can really both banking QX at enterprise prospects.

become down of part as it that Studio of decision. deals throughout to seeing we're took the deal, Innovation cited I cited in differentiating conversation that XX% a north deals. factor of their quarter this it, said, the so, And that and these yes, as as And led a and

lot do how adding expose it's a applications, docs factors. see self-service everything API menu I we're of looking that at, models can they're the of really seeing everyone we value the discussions. and of a to where And So, think to And is. everyone it's these multitude it the upfront,

and continue. on moving is XX% not, and whether we want impact, or forward, So, ability to our a certainly think definitely that's it's But to we'd that the deal. XX% XX% -- the to see going number, high an least using barometer right have we grew customers are that of in talked win one new existing customers over how now about we partner But program. our ecosystem at also, quarter, banks' by the

base. to We also be impactful to existing expect this customer very the

opportunity So, big well. as that's us a for

Unidentified Analyst

Very Thanks helpful. everyone.

Matt Flake

Thanks, Michael.

I think more. we one have time for

Operator

come from ahead, last Stephens. Please will from Charles Our line Nabhan open. question is go your

Charles Nabhan

Hi, your good implementation your for morning, comments and to I comments my you taking on wanted thank capabilities. on some -- further question. get

the in investments some made you've year. Specifically, past

And in the lives concentration expected could demand secondly, just where second margins? to have uptick over the ramp But you lives a years? you year, those in expecting next of go as coming half couple in investments given a of terms the think anticipate obviously are You headwind up. higher curious, and go stand you the up the given and services of the we professional revenue

Matt Flake

those one independently. each I'll of guess I Charles,

opportunities second-half to invest And of So, implementation started that's of yes, those some continued we last book in as year. to did the we the ramp. resources

a been strong to have mention have have we about the talking not strong we morning that we As got throughout fact morning, a this the QX. pipeline,

year, the but of implementations now this into So, of XXXX. to all that leads more not end at only

of deliveries we area focus utilizing of that is adding doing primary So, a continuing customers. hitting And our to great currently. are on of And time sure job our that a resources new to be us. then, resources for make we're

is up cost In terms all of of incurring are that that works half the end you shouldn't the deal. the we of most the And the the of the the say that during of model I but go revenue all, most the Well, year, to are second the way once that we of course lives, time. recognize course over deferring we services then them. live, of over go them. of life starting

cost. the the as licensing well as services cost So, it includes

cost seeing I of related anticipate So, to [ordinary] an not [Ph] implementation fees. license amount you would the

Investor about in mix in our continue the see for very rest important back for QX starting as being and that That's December, of year. feel a to is the we However, one business that we is base. see Day large talked in and the strategically business to something for you customer also our us premier of are very services sticky

Charles Nabhan

color. you. appreciate Got the it. I Thank

Matt Flake

Charles. Sure,

Operator

the remarks. I presenters like questions. turn over further no have We for any to closing back the to call would

Matt Flake

Thank everybody you, you Operator. attending And today. thank for

obviously the And a optimistic over for what of and half back we encouraged will for have talk everybody the year. of very attending. by are you quarter. of this are quarters Have great the the We seen last rest we about couple to day. Thanks

Operator

conference call. This concludes for your Thank today's participation. you

may You now disconnect.

Q2 (QTWO) 3 May 222022 Q1 Earnings call transcript