Good morning. My name is Stephanie and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 Holdings Fourth Quarter and Full-Year 2020 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn today’s call over to Josh Yankovich, Investor Relations. Sir, please go ahead.

Thank you, operator. Good morning everyone, and thank you for joining us for our fourth quarter and full-year 2020 conference call. With me on the call today is Matt Flake, our CEO; David Mehok, our CFO; and Jennifer Harris. This call contains forward-looking statements that are subject to significant risks and uncertainties, including the future operating and financial performance of Q2 Holdings. Actual results may differ materially from those contemplated by these forward-looking statements and we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included in our periodic reports filed with the SEC, including our most recent annual report on Form 10-K and subsequent filings and the press release distributed yesterday afternoon regarding the financial results we will discuss today. Forward-looking statements that we make on this call are based on assumptions only as of the date discussed. Investors should not assume that these statements will remain operative at a later time and we undertake no obligation to update any such forward-looking statements discussed on this call. Also, unless otherwise stated, all financial measures discussed on this call will be on a non-GAAP basis. A discussion of why we use non-GAAP financial measures and a reconciliation of the non-GAAP measures to the most comparable GAAP measures is included in our press release, which may be found on the Investor Relations section of our website and in our Form 8-K filed with the SEC yesterday afternoon. Let me now turn the call over to Matt.

Thanks, Josh. Today I’ll share some highlights from the fourth quarter and full-year 2020. I’ll then turn the call over to David Mehok, our new Chief Financial Officer for a more detailed look at our fourth quarter and 2020 financial results, as well as guidance for the first quarter and full-year 2021. In the fourth quarter, we generated non-GAAP revenue of $109.7 million, up 24% year-over-year and 5% sequentially. Non-GAAP revenue for the full year was $407.2 million, up 28% year-over-year. We had approximately 700,000 registered users in the fourth quarter ending the year with 17.8 million users on our platform, a year-over-year increase of 22%. As these results indicate, the fourth quarter was a solid finish to an unprecedented year for our business. We continue to generate considerable expansion activity within our customer base, onboard new customers and users at an impressive rate. We saw another surge in digital activity prompted by stimulus payments issued in December, which our teams and systems managed well.

Thanks, Matt. My first quarter as part of the Q2 team has clearly illustrated to me the talent of our team members and the strength of our solutions and financial model. I couldn't be more excited for the opportunities that lie ahead. We were pleased with our financial performance for the quarter as we exceeded the high end of our revenue guidance and we're within the range of our adjusted EBITDA guidance. Before I begin providing more detail on the results, let me give you some clarification and quantification of a couple of items. First, due to the maturity of our Cloud Lending business, during the fourth quarter, we aligned our accounting for professional services revenue to be recognized over time as services are performed, rather than at the completion of those services. At the same time, we also aligned the costs associated with those professional services contracts to be recognized as they are incurred. This change resulted in an acceleration of recognition in the fourth quarter of $3.3 million in revenue and $4.2 million in cost of revenues, as well as the corresponding reduction in deferred revenue and deferred implementation cost balances. Second, during the quarter, we recognized a contract asset impairment related to the restructuring of a contract with one of our fintech customers, resulting in a $2.8 million negative impact to revenue and gross margin. The combined impact of the accounting adjustment and contract asset impairment resulted in a net increase to fourth quarter revenue of $467,000. The total impact to gross margin of these two adjustments was negative $3.8 million or an approximately 370 basis point reduction to our Q4 gross margins and an approximately 90 basis point reduction to our full-year gross margins. Throughout the remainder of my remarks, I will provide commentary on our financial results where appropriate, noting the impact to our financial results from these adjustments. Now, I'll review our results for the fourth quarter and full-year of 2020 before finishing with guidance for the first quarter and full-year of 2021. Total non-GAAP revenue for the fourth quarter was $109.7 million, an increase of 24% year-over-year and up 5% sequentially. Total non-GAAP revenue for the full-year 2020 was $407.2 million, up 28% year-over-year. Both the sequential and year-over-year increases were positively impacted by an increase in subscription and services revenue associated with the deployment of new customers and incremental users onboarding to the Q2 platform.

Thanks, David. In closing, I'm very proud of our performance in 2020. I believe we'll look back on this year as one of the most transformative in our history. And I'd like to thank our team members, partners and customers across the globe for their perseverance and commitment to their communities and to Q2. As we look ahead to 2021, I believe we've demonstrated that we're prepared to operate in this environment going forward. While we clearly are not past the COVID-19 pandemic and its many implications, my conversations with our customers and prospects indicate that an accelerated technology refresh is on its way, with digital transformation being a key initiative across customers' businesses in 2021 and beyond. While it's unclear when the predictability of deal timing we enjoyed pre-COVID will return, our pipeline is strong, and I expect to see continued incremental improvement in sales performance quarter-over-quarter as customers continue to adapt and return their focus towards digital initiatives. Finally, I believe the strength of our underlying business model showed itself in 2020. And in 2021, I believe we’ll continue to sustain strong revenue growth while steadily improving the profitability of the business. Thanks. And with that, I'll turn it over to the operator for questions.

Thank you. And our first question is from the line of Sterling Auty of JP Morgan.

Yeah, thanks. Hi guys. Before I ask my one question, I think Texas is getting hit with unprecedented weather and conditions. I didn't know if maybe you guys want to give us an update. And hopefully you guys are holding up okay.

Yeah. Hey, Sterling, thanks very much. I appreciate the question. You know, right now it is a natural disaster with a splash of manmade, 2.5 million Texans are without power, heat, or water. 50% of our employees are without power, heat, and/or water. So, it's pretty crazy – from an earnings call perspective, we are all at different locations. I would just suggest that there's a reasonable chance that we will have some technical difficulties on this. So, don't worry about us on the call, we'll all be fine. But it's a tough time down here. But we really appreciate the support everybody has given us. And, you know, attitude is all you have right now. We had a great Q4, we had an amazing 2020 and 2021 is setting up to be really good. So, if everybody would try and keep the questions to one, we've got a hard stop at 8:30. So, I'd appreciate it, but thanks for asking Sterling, and that's not going to be your question, you get one question, so fire away.

I appreciate it. So just on your closing remarks, and by the way, thoughts and prayers to all the families that are going through this situation, but in your closing comments the demand from new customers for new solutions from Q2, you talked a little bit about it last quarter. You kind of made some comments here. I'm curious, are those potential customers actually budgeting for potential projects here in 2021? What's the early kind of breadcrumbs that have you confident that we'll see an improvement in that new customer demand?

Yeah, Sterling. It's a great question. I think that's the real question I think the people need to get to. Everybody can talk about top of the funnel, but nobody cares about anything until it gets through the funnel. So, right now, what I'm seeing is, you know, Tier 2 and Tier 3 were pretty steady in 2020, and they hit – well, they didn't hit the pre-COVID plan, they came pretty close. It was the Tier 1 deals that just kind of dried up across the board on digital banking and lending globally, but what we're seeing now is that the Tier 1 pipe is back with deals that have committees, budgets, project plans, and timelines. I think you're going to begin to see that materialize both on the lending and the digital banking side into 2021. I don't know how quickly they're going to happen, but there are much more real deals with real engagement that's occurring right now. So, the Tier 1 pipeline is back. And I'm not just talking top of the funnel. There are deals that are out there that are active. I wouldn't expect a floodgate to open in Q1, but I think you'll begin to see some of these happen to where, you know, hopefully it gets back to the cadence that was in 2017, 2018, and 2019.

All right, great. Thank you.

Thanks, Sterling. Appreciate it.

Your next question is from the line of Tom Roderick of Stifel.

Yeah, great. Thanks. Thanks for taking my questions and I'll echo Sterling's comments, hope you and your families are staying safe down there and hopefully staying somewhat warm, but keep at it. Appreciate you guys still holding this call this morning. So, you know, we've kind of gone through this every single year where it's the cadence of the deals as they come in. And you had a great Q2 for big deals and a great Q4 for big deals, it seems like and I was sort of hoping, you could obviously you gave Q1 guidance and the full-year guidance. But David and Matt, if you wouldn't mind to sort of walking us through sort of the cadence of how that kind of plays into the numbers as we think about our models going through this year. I know you can't guide to Q2, Q3 exactly, but just, you know, how much of it is backloaded and how we think about that? And then maybe piggybacking on Sterling's question regarding the pipeline, you know, as we think about this year, you know, how do we think about when and how some of these sort of Tier 1 deals continue to come through? Because it seems like precision lender in the lending intelligence side of the equation is really starting to, you know, the floodgates are breaking open on that. So that might be a little bit different than we've seen in your past.

Yeah, so I'll take the first part, and David can kind of walk through how it plays out. First of all, I would say that cadence isn't the word I would use for 2020 because there wasn't really a steady cadence, but it did build right. Q3 was the trough I believe for us. And so those deals that we got this year, the fourth quarter was interesting because the momentum started Q4, and then in the last three weeks of the year we got hit with the COVID surge, plus the stimulus program that those deals rolled into January and we got it done. So, you're beginning to see the timing of these things. I think you may get back to more big Q2, and then a big Q4, a big second quarter, and a big fourth quarter like it like normally happens, I would be a little hesitant on the second quarter right now, just because I want to see how things play out. But David, do you want to walk through how that rolls out? How that plays out in the model?

Yeah, sure, Matt. A couple of things I'll call out in that regard. First is, we talked about the two big deals that we implemented in Q4, those were November, December implementation. So you're going to get a full quarter of those in Q1. So, as you look at that Q1 guidance, it does assume a full quarter of those two large implementations. And then to Matt’s point, as we look at the demand environment, first and foremost, it's great news that we're seeing the Tier 1’s return to the pipe, and those again are starting to materialize in a much more real fashion. We feel good about how those are starting to play out. And that's great for the long-term profitability and revenue trajectory of the business. However, the profitability aspect of that and when that turns into revenue, because those are Tier 1 deals typically as you know, about a 12-month to 18-month lag. So, the implementation timeline has to be factored in there. So, as we see these deals start to materialize, we see them start to project out over the course of the year. We're not going to see that turn to revenue until in all likelihood 2022. So great news that we're seeing those deals come through. We feel really good about our prospects in many of them. However, you're not going to see those turn to revenue as we land until 2022. One other key point to factor into how you are thinking about things is, we do have a bit of a headwind about a 100 basis point plus headwind when you look at the 2020 to 2021 impact of the accounting adjustment we talked about, as you think about it, we're taking $3.3 million that we would have recognized in 2021 pointing that off the balance sheet and recognized it in Q4, and then the year-over-year impact of both PPP and the CARES program. So, you combine those three things and that's a little bit over a point of a headwind of growth. So, we still feel confident in our 20% to 21% even with that factored in there.

Yeah, really helpful. I appreciate it. Thank you. Stay safe out there.

Thanks Tom.

Your next question is from the line of Brian Peterson of Raymond James.

I hope you guys are staying warm and staying safe. So, maybe just a follow up on Tom's question. So, Matt, obviously some encouraging comments about the shape of the pipeline and how that's looking into 2021. I'm curious, is there anything in terms of customers maybe looking to try to accelerate implementations? Right, I understand historically, it can be, you know, 9 months or 12 months or 18 months, but, you know, are they looking to get quicker in terms of making a decision and getting that up and running? Is that something that's possible with remote delivery and just, you know any thoughts on that?

Yeah, Brian, it’s a question. Thanks for your comments. Speeding up implementations is just not typically how people think about it. There's a lot – the delivery of the software is one thing, but the organizational readiness that the teams have to have, and I'm talking about the platform side of the business, it's just hard to speed it up. As I've said before, they are usually trying to – on the Tier 2 and Tier 3, they are trying to time it with the exploration of the contract. So, I don't think that you'll see people speed up the implementation timeline. Now, I think that on Precision Lender, and Cloud Lending and the BaaS side of things, people are trying to move a little faster on those. Because those applications, it's either a net on the BaaS side, it could be a net new application that nobody has used before, you don't have data conversion, and on Precision Lender it’s the same way as well. So, some of those, I think you'll see people don't want expedited implementations. But on the digital banking side, it's a little bit of hard surgery, and speed is typically not what people want to do.

Got it. Thank you.

Thanks Brian, appreciate it. Yeah, thank you.

Your next question is in the line of Terry Tillman with Truist.

Yeah, thanks for taking my question. I’ll go with some of the other comments. Appreciate you all doing this call, given everything going on and our thoughts are definitely with Q2 and Texas. You know, really, Matt, it kind of relates to some of the earlier questions people were kind of bookings and how you think about that in 2021. And you just mentioned on digital banking. What I'm curious about is, what happened in 2020, kind of, you know, probably brought to light some really poor digital banking experiences that were occurring. And so, I'm curious as we're starting to kind of fall out here in 2021 and beyond, in terms of demand and people looking to do stuff. Do you see a potential multi-year, even on the retail banking side and on the commercial banking side, just kind of curious if there's a theme that we could start seeing around the replatforming cycle? Thank you.

Yeah, thanks, Terry. Not falling out yet, but we're getting there. So, I would say that the replatforming ties into the digital transformation conversation that we're having with these customers, which is, you can't do it all at once. So, you have to go and you're going to do retail first and then commercial? Are you going to do corporate first and then work to digital? Are you going to do lending, you know treasury onboarding, how does that all tie into it? So, I think that the things that we're seeing from these Tier 1’s we're talking about are strategic plans, where we may sign a retail deal initially, and then you move to corporate banking down the road, but it's part of the plan. Now, they may not contract for it initially, but if you deliver, and you hit the schedules, and they have a good experience, and they get to know you, those are all the opportunities you've had. Adding the lending element to it is interesting or building off of the lending element. We are seeing deals now that are a precision lender deal that's becoming a platform deal for us in the pipeline. And we're seeing, you know, we have a team that sells off platform. So, they're basically calling on customers that are not Q2 customers, and they're selling our Centrix products or digital acquisition products or CardSwap products. Those are starting to land, and it's beginning to be a meaningful number in a quarter. And we're reaching back out to those customers and seeing whether we want to begin a digital engagement replatforming of their digital banking and their lending solutions as well. So, there's a lot of cross-pollination. I know we use that word a lot that's happening in this space. And that's leading to the conversations about whether it's replatforming or having a digital transformation roadmap that we can lead them on with our products, because we have the broadest set of digital experience technology in the marketplace. And we can give them a roadmap to how to get there. Thanks, Terry.

Alright, thanks. Take care.

Your next question is from the line of Andrew Schmidt of Citi.

Hey guys. Thanks for taking my question here, and let me echo everyone else’s comments, hope everyone is staying safe. I want to touch on user growth briefly, and you talked about elevating user growth in the fourth quarter, and that seems to be a theme all year. Can you just talk about kind of expectations for FY 2021? Should we expect to see elevated organic user growth? It seems obviously there's been a step up in seasonal engagement, customers being pushed on in digital platforms, just wondering how you guys are thinking about 2021 organic user growth relative to historical trends. Thanks.

Yeah. Thank you, David, why don't you take that one?

Yeah, sure, Matt. Thanks, Andrew. Yeah, we actually have seen and I know that we talked about this in the last call, the organic user growth has been on the high-end of what we've historically had as a range. And that range is typically a bit about 9% to 11%. We've seen that now for three straight quarters where we've been on the high-end of that growth range. As we're looking out into 2021, we’re very confident in our ability to continue to operate in that high-end range. So, as you're modeling it out for the remainder of the year, we think that you know 10% to 11% range is going to be much more aligned with what you will see in 2021 versus the 9% to 11% that we've seen historically.

Got it. That's great to hear. Good to hear the comments in the demand environment. Stay safe, guys. Thanks a lot.

Thanks, Andrew. Appreciate you.

Your next question is from the line of Peter Heckmann with DA Davidson.

Hey, good morning, everyone. Thanks for taking my question. Could you just talk about some of the circumstances around the impairment on the fintech contract? Was that as a result of a customer getting acquired, or potentially just switching some of their focus?

Yeah, thanks Peter. David, why don’t you take that one?

Yeah, you got it Matt. Hey, Pete. You know, first of all, I think it's important to make sure we're clear that the size and the scope of this impairment is unusual. It's not reflective at all about the strength of our fintech partners as a whole. And just to walk through the journey on this one, you know, we started to partner with fintechs a couple of years ago. A lot of the partnerships we had were with early stage fintechs. As you can imagine, those early stage fintechs didn't have the strongest financial profile. As we've matured as a business, the strength of the solutions that we've had has allowed us to move up the stack of fintechs that we're partnering with. The ones that we're partnering with today are very strong financially. They're very secure partners financially. And as we take a look at the Top 10 fintech customers that we have, the mix has shifted dramatically to those that are larger and more financially secure. We feel like the exposure going forward is very low relative to any contracts like this. And just to give you a little bit more context, Peter, on your question around what was the situation? It was one of those early stage fintechs that we had partnered with? And we had to renegotiate some of the terms of that contract given some financial instability that they had. But again, we feel really good about how the remaining customer-base, if you look at those that are the Top 10 and/or material, and any exposure that we have to some of those lower end is very minimal.

That makes sense. That makes sense. And does that contract contribute to that little bit higher churn rate, or is that not included?

It was about, yeah. It impacted churn by about a tenth.

Thanks, Pete. Have a great day.

Your next question is from the line of Dan Perlin of RBC.

Thanks and good morning, everyone. I just had a question kind of trying to reconcile Matt, the idea that Tier 1 banks are kind of back. I think you said they, these are deals happening now, but then also a little bit more on the commentary around the possibility of churn being elevated, you know, maybe because of slow down even still in terms of decision making, but maybe more specifically around M&A. And to the question, just kind of reconciling how you deal with that this year? And then secondly, to the extent that we do see higher churn rates as a result of M&A, can you just remind us how you were able to toggle, you know, the model in order to sustain, kind of the 20% plus growth that you guys have laid out there? And hope you guys stay safe.

Yeah, I mean, I think that we're anticipating – part of this is just trying to set the right expectations. We just want to make sure that churn picks up because of the M&A that we're able to, you know, you guys don't surprise you at all, but I don't – I think that one of the things that we've seen and David said in his comments is that we are usually the winner in acquisition, because our customers are forward thinking and they want to use the next generation platform to compete, whether it's for lending or for digital banking. I think the churn piece is something that we have to manage, and we're trying to communicate ahead of it. I think that for us, I think we'll probably be the net beneficiary from a revenue perspective, adding more users onto the platform due to acquisitions in 2012. But who knows whether there's going to be more acquisition or not in 2021. That's what people are saying, but we'll just see what happens. And then David, I think the other part was for you.

Yeah, and one thing I’d just add to that Dan is, you know, and we proved this out over the course of the last nine months. We've got a very resilient portfolio business and when we're struggling in one area of the business is, you know, there was some indecisiveness and understandably, some of our customers were distracted with some of the other things they had going on out in their business and that, but what we're able to do was pivot towards renewals. We have a business-critical solution for them and we were able to reach out and make sure that they were extending the contracts that we have with them that helps us in terms of our backlog. The other thing that really helped was using the stickiness of our portfolio and the strength of our solutions to add incremental solutions, which is why you saw the strength in upsell. So, we have the ability to utilize those levers and make sure that we have the balance between all those if one's not quite where we hoped or thought it would be. So, that's the flexibility that we have and that's the flexibility that we continue to leverage as we go forward into 2021.

Thank you.

And Dan just keep in mind that when an acquisition happens, there's usually a term fee and some earn-out that occurs in the buyout process. So, typically – and it takes 12 months to get them off the system. So, it typically doesn't impact the year you're in as much as it does down the road. So, thanks again for the question Dan.

Thank you.

Your next question is from the line of Brett Huff of Stephens Inc.

Good morning guys. Again, hope you're both safe Matt, and welcome David. Quick question on organic growth, want to make sure I got the organic growth roughly right for 4Q and then 2021. I think my thought it was maybe high teens organic in 4Q, and that's accelerating kind of low 20s? I don't think there's anything inorganic in 2021, and just want to – number one. And then number two is, you know, can you disassociate what is sort of maybe catch up, you know, people signing deals later in the year, and maybe seems most common versus sort of the groundswell of the digitization that you're seeing in terms of supporting that low 20s? Thank you.

David, why don’t you take the first part of it?

Yeah, I'll start with the organic piece of Brett, and what I would tell you there is, you know we haven't broken it out discreetly in terms of organic versus inorganic, but what we've said is, we anticipate that, and this was reset, when we did the post-COVID plan. We anticipate that Precision Lending is going to be about 6% of our overall revenue. That's where we’re targeted and that's where we essentially finished. And you're right, as we head into 2021, there's nothing that you need to normalize from an organic standpoint – from an inorganic standpoint to get to an organic number. So, the numbers that you're seeing and the guidance that you're seeing for 2021 is the same for organic versus inorganic.

Yeah. Brett, the other part of the question, was that the whole question?

Yeah, I just want to make sure that if you can decide to – kind of piggyback on the last question, how much of the sort of acceleration organic growth is maybe some catch-up as we get some deals implemented and maybe got pushed, and how much of it is more of a groundswell of maybe faster digitization because of the COVID, you know a more fundamental shift? Thanks, guys.

Yeah, thanks. Well, I don't know if I could break that out on this call here. I think there's a combination of both that are occurring. There'll be some deals that have to catch up because they didn't do a deal last year, there’ll be some deals that had to renew last year because they're in a pickle and then you'll have a pickup around more users on the system, you'll have more people using the system, and then there should be somewhat of a groundswell of people that need to – that realize the pain that they felt during these times with lockdowns and everything else. So, thanks again Brett.

Great. Thank you.

Your next question is from the line of Robert Napoli of William Blair.

Thank you. Good morning. Glad to hear you're doing well. We have several family members in Austin so we understand what's going on. Question on revenue per user, you know talking about user growth at the high end, what are your thoughts on revenue per user? Where is the growth of revenue per user coming from? Like, which product – is it from new products versus, you know further penetration of your clients and which new products are you most excited about?

Yeah, Robert I'll answer that. So, what I would tell you is, we did see a slight decline in average revenue per user in FY 2020 and part of that was, if you remember, the CARES program that we rolled out, where we did reduce some pricing, per user. In return, we got extensions of many of the agreements that we had out there, we thought that was very beneficial to our customers to help in the short-term and then obviously extends the relationship we have which benefits both of us longer-term. As we look forward into 2021, we do feel like we're going to see a slight uptick in average revenue per user and some of that is going to be driven by, I think this is what you're referencing, some of the new solutions in cross-sell opportunities, and some aren't just new, but they're enhanced of what we currently have. The Centrix product continues to be very strong in terms of the demand that we're seeing for that. We're seeing improved demand for our gross solutions as well. Matt had talked last quarter about the Treasury onboarding solution, which we're just now coming to market in a more aggressive fashion with. We think that that could really get some legs as we get into Q2 and Q3 of this year. So, we feel really good about the ability to cross-sell. And with that cross-sell comes enhanced average revenue per user profile.

Great, thank you.

Thanks Bob.

Your next question is from the line of Joe Vruwink of Baird.

Great. Hi, everyone. You know, just focusing on product innovation. I know, it's always been at the core of Q2, but just given some of the things that have played out over the last year, it is not just PPP, but you know, Treasury onboarding, Precision Lender has this new portfolio insights product that just came out? Do you feel like the velocity of the new products inside the organization is increasing? And given many of these things seem to be leveraging the newer cloud platforms? Is there maybe the potential that some of this product innovation drives, you know faster time to revenue? And we start to see a change and kind of the dynamics of your revenue model where there is this potential to see more near-term upside in growth?

Yeah, it's a good question. I think one of the things you'll see is, it's like I talked about earlier, when Brian asked about whether you can speed up the implementations. If you take the digital banking segment, I think it's very difficult to deliver digital banking faster than six months, because the end user, the account holder, or the bank doesn't want to go through that much change that fast. And there's a lot of – it's not a technology delay, as much as it is an operational organizational readiness prepared to roll out. But if you look at Precision Lender, or banking as a service people are riding against our corporate product in a week. Precision Lender is tied to the bank being ready to roll and get it out. It can go live rather quickly. Cloud Lending, the PPP product was built in three weeks with forgiveness tied to it, and we had to roll that out and up and running. So, the technology is where people sometimes get wrapped around, but it's really the process that the financial institution or the fintech has to go through. And if you don't have customers, when you're talking about moving, you know, 100,000 digital banking customers from one system to another when they have to reset things up and log in new passwords, look what happened at the call center, it's complicated and those are the crown jewels of the bank or the credit union, we want to move them carefully, and they do too. So I think, yes, you will see an acceleration in the delivery of some of these things, but those businesses have to continue to get bigger to have more of a meaningful impact on the revenue side of things. And look, they're all, I talked about earlier, Cloud Lending, banking as a service, some of the other data insights products that we have, are really gaining some traction, and we're starting to leverage the innovation, and the sales team, the relationship management team has really come together with this one Q2 message. And in January, we had a sales kickoff and we really spent most of it just educating and case studies and talking about how they can go out and have these conversations. So, there's going to be a lot of leverage that comes out of that. And these conversations are going to continue to drive more deal flow for us. And I think you'll end up seeing that some of these BaaS, these products that don't have nasty conversions to go through will begin to have significant traction and will get through revenue faster, but I don't know what the timing and that's going to be. Thank you. Appreciate it.

Thank you.

Your next question is from the line of Josh Beck of KBCM.

Thanks for taking the question team and certainly, I think we're all pulling for speedy recovery there in Texas. I guess wanted to ask a little bit about the go-to-market that you talked about more or less that you have lots of different in-roads now, it could be retail, commercial, corporate lending, there's a lot there. And so, I'm curious from a go-to-market point of view are you leaning on more of a generalist sales model? Is it, you have specialized forces in some of these areas, just curious about how you're approaching this as we move forward?

Yeah, I mean, Josh, what I look for is, I don't care if you're 25 or 55. I want passionate people that want to learn about how digital transformation is going to happen within these banks and credit unions and how they can use our technology to go and sell these products. And that passion is always translated, and people can see buyers know whether you believe it or not. Our track record of delivering and innovating and taking care of customers is what I think we'll end up selling a lot of software for us. So, the go to market is really based on the segment we're going after. So, we've combined banks and credit unions now. So, sales reps are going after both of those. You could have a credit union in your past, you could have a bank in your past, you got to be able to talk about digital transformation on both of them. You know, they'll talk about lending digital banking, digital acquisition data, and it's hard. And so they've got to get up to speed. We're spending a lot of time educating them, whether it's our office or strategy or our product team that's doing that. So, go to market – the interesting thing for me really is, in the pandemic is, the amount of coverage we're able to get with whether it's technologists, implementations people, product people, whatever it is, where we can get them in front of these prospects more because – and customers because we're on airplanes. And so if you just eliminate the travel time, from these opportunities, we're able to have a product specialist get on a call with a prospect and go deep into how the technology works. And that is a big advantage for us when we can do that. Because there's some new shiny objects that don't go very deep when it comes to the operational side of the business, which is important. So, I don't think there's a big change in go-to-market. I think it's a matter of how we're educating our team and picking the right folks to do it. So, not exactly what you asked, but I think that's my view on how we're going to market and I think 2021 is going to be very interesting to see how it plays out.

No, I think that makes total sense. Thanks, Matt.

Appreciate it.

Your next question is from the line of Arvind Ramnani of Piper Sandler.

Hi, thanks for taking my question. Hopefully, you guys get the power back soon. Just kind of looking back at the 2016, 2017. You know 2017 was a very strong year given it was a post-election year. Can you talk about the dynamics in 2021, which in the context of a post-election year? Or is this kind of a very tough compare given that 2020 was pretty unusual?

Yeah. One of my objectives on these calls one of these days is to not use the word unprecedented, because that’s overused at this point. But you know the election is the only thing that was similar that there was an election, the way the election played out, the pandemic is what is the difference. And that's the – that I can't really do like-for-like comparisons, because it's not like there's a new administration, let's get back to business. There's stimulus programs, there's COVID surges, there's all these different things that are happening, vaccine rollout, delays, and different issues what we're going through right now. So, it's very difficult to compare the two of them. I like where we are as a company in 2021, as opposed to where we were in 2016 and 2017. The breadth of the products, the acquisitions are coming together, the digital transformation, the requirement of these banks to begin or credit unions to be able to deliver this technology remotely. We're just in a very good spot compared to some vendors that may be single-threaded with single products. We don't have a lot of customers who don't have a lot of the right customers. So, it's hard to compare them Arvind, but it is crazy as it may sound in a house with no power and no water that's frozen over, unlike where we are in 2021, as opposed to where we were in 2016 and 2017 moving forward to the trajectory of this business. So, with that we've got time for one more question and appreciate the question Arvind.

Great. Just, you know, operationally how are you thinking about staffing in this post spending environment? You know, specifically as employees start to travel and take vacations at higher levels over the next 12 months to 18 months? You know, are you staffing or kind of building a team start for potentially, you know, higher levels of vacation?

Not for higher levels of vacation. I mean, I think we try to be, you know, we have an unlimited PTO plan that people can use the company, but there's no change for vacationing. I think the office space is the thing that, you know, we're trying to manage and figure out what we're going to do moving forward, but essentially we have told our employees that we don't know when you're coming back to work or if you are coming back to work we have to operate as this is the world we're living in today. And so, we will – I’m certain people will start coming back into the office at some point, but I'm not going to mandate that. I don’t want to be a pioneer on putting people back in the office. So, staffing for us is, we want to try to find the efficiencies of what we can do. As I said earlier, whether it's sales people, implementations people, keeping them where they feel safe, and they feel they can do the job productively, if they don't have to be on an airplane, I don't want to make it the other airplane. If they want to go to see people and most people want to see them, then, you know, we'll approach that as well. But how we interact in large client conferences, those types of things, I think those are put on the for a while. So, no changes on the staffing model other than the real estate piece, which we’re managing effectively. Thank you, Arvind. We've got we got time for one more question.

And your next question from the line of James Faucette of Morgan Stanley.

Great, thank you very much and you guys have mentioned resilience a few times, hopefully, you start being able to be less resilient pretty soon, personally, but just quickly, most of my questions been answered. But as far as international, clearly, a lot of the value you're bringing to your customers here in the U.S. could also be applicable outside the U.S. So, how are you thinking about that as a potential? And how would you start to address that either organically or through acquisition? Just some thoughts there would be great? Thanks a lot.

Yeah, thank you, James. So internationally, remember, we have a presence in Europe. We have an office in London and we have customers that are both – that are lending customers over there, we have Precision Lender, which is actually beginning to see some traction in the pipeline over there that I hope to see some deals in the second half of the year, take place, we will continue there's potential BaaS opportunities in Europe. Asia, also we have offices in Sydney, Australia, that team really had a pretty solid fourth quarter, given that they missed their summer in December they shut it down. So, there's a lot of opportunities not only in Australia but Asia that we're working. We have some pretty large resellers. They seem to be coming back online sooner. So, we'll continue to invest in those regions and in the products in those regions. Digital banking is not something that we're taking to those places. We're really focused on North America, but there are opportunities there, but we're getting we're going there in a very measured way. That can be very expensive. And having big offices and spending a bunch of marketing when you don't really know exactly what you're doing is not what we're planning on doing. So, we're going to continue to push Precision Lender and our lending products in Europe, and Cloud Lending in Europe and in Asia and Australia at the time and I feel pretty good about where those are. And I feel pretty good about where we are from a standpoint of, we're not too heavy in those areas, and Europe really took a hit and slowed down. So, feel really good about international stuff. It's just going to take a little more time for us to generate patient and measured in how we do this. So, thanks for the question, James. I appreciate it. And thanks everybody for joining us. We will be on investor calls, we’ll be in investor conferences over the next couple of weeks, and also we’ll be available in the coming days. So, I appreciate everybody's patience and I'm just amazed we got through this without any technical difficulties based on how the weather behaved recently. So, thanks everybody. Hope everybody has a great day and a great weekend. Stay safe.

Thank you. This does conclude today’s conference call. You may now disconnect.