Q2 Holdings's Earnings: A Preview

Q2 Holdings QTWO announces its next round of earnings this Wednesday, February 17. Here is Benzinga's everything-that-matters guide for this Wednesday's Q4 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street analysts see Q2 Holdings reporting earnings of $0.05 per share on sales of $106.43 million. In the same quarter last year, Q2 Holdings reported earnings per share of $0.38 on sales of $86.84 million.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street estimate would represent a 86.84% decline in the company's earnings. Revenue would be up 22.56% on a year-over-year basis. Q2 Holdings's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Q2 Holdings were trading at $145.6 as of February 15. Over the last 52-week period, shares are up 67.82%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Q2 Holdings is scheduled to hold the call at 08:30:00 ET and can be accessed here.