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 Investor Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers' remarks, we will have a question and answer session.
I will now turn the conference over to Steve Koch, Director of Investor Relations. You may begin.
Thank you, operator, and thank you all for joining us on short notice today. Before we begin, I'll note that we have made slides available in the Investor Relations section of our website. We will be referring to those today as we discuss the transaction. This call will contain 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 with the SEC. This includes our most recent annual report on Form 10 ks and subsequent filings and the press release distributed this morning regarding the information we'll discuss today. Any forward looking statements that we make on this call are based on assumptions only as the date discussed. Investors should not assume that these statements will remain active at a later time, and we will undertake no obligation to update any such forward looking statements discussed in this call. I'll now hand the call over to Matt Flake, CEO of Q2.
Matt?
Thank you, Steve. Turning to slide three, I'm joined today by Carl Riedine, CEO and Co Founder of PrecisionLender and Jennifer Harris, CFO of Q2. On today's call, we will walk through an overview of the transaction, give you a brief introduction to PrecisionLender and close out with some financial commentary. After that, we should have a few minutes to take your questions. So let me start with an introduction of the transaction and our strategic rationale for acquisition.
I'll begin my remarks with slide five. We are obviously very excited to share some details about the transaction with you today. With the addition of PrecisionLender, we believe Q2's position as a leader in digital transformation for financial services globally is substantially strengthened. And we are positioned to accelerate our growth, adding PrecisionLender's innovative solutions to our proven land and expand go to market strategy. We believe future innovation in financial services will come from data.
With the addition of PrecisionLender, we significantly accelerate the scale, quality and type of data we leverage for innovation. PrecisionLender provides a set of solutions that complement our existing portfolio, helping us expand the opportunity we have in our traditional markets. In addition, they have a presence in select international geographies with global enterprise banks, a segment we have not traditionally approached with the Q2 platform. Finally, PrecisionLender and Q2 are a great cultural fit. This purpose driven leadership team has a proven track record of high customer satisfaction, continued innovation and strong employee retention.
I'm excited about the things we'll be able to do together as we work toward our common mission to build stronger communities by strengthening their financial institutions. Turning to slide six, let me share our rationale for this investment. First, PrecisionLender is a cloud native SaaS provider. They are committed to delivering what progressive banks need for the future, a modern cloud based SaaS application for making smarter, more profitable loans. With an impressive time to value for customers, their solutions can be up and running within ninety days of signing.
Next, PrecisionLender improves Q2's position in the commercial lending value chain, one of the most critical areas of profit for our customers. In addition to our organic investment in corporate banking, the talented team and innovative solutions from Cloud Lending combined with PrecisionLender will expand and deepen our position within commercial banking. This will open up new opportunities and support our existing commercial banking customers with critical sales enablement, pricing and portfolio management capabilities. No matter who I talk to, I hear that data analytics, talent and innovation are critical across financial services. And with the addition of PrecisionLender, we're adding a great deal of new and valuable data, as well as key talent and technology to strengthen our existing portfolio of solutions.
PrecisionLender has a large and expanding addressable market that is accretive to Q2's total, adding $2,000,000,000 to our current TAM. And finally, the relatively short time to value and SaaS infrastructure of PrecisionLender solutions create an attractive growth profile that we feel will be accretive to our financials. Moving to Slide seven. I'm excited about the PrecisionLender team and how they complement Q2. Our combined company will have nearly 1,400 incredibly talented and passionate employees with PrecisionLender adding roughly 150 team members.
The team operates primarily out of Cary and Charlotte, North Carolina. These attractive markets are key to future expansion efforts for Q2 overall and will continue to diversify our talent pool. In addition to these domestic offices, PrecisionLender has talent in offices around the globe, serving roughly 150 customers today. PrecisionLender solutions are currently helping banks price greater than $1,700,000,000,000 in loans annually. Because their solutions can help commercial bankers build stronger relationships with key commercial customers, banks using PrecisionLender have seen an average of approximately 8% higher deposit growth and approximately 9% growth in commercial loans according to FDIC data from December 2017 to December 2018.
These are key measurements of growth for any commercial bank. In addition, as of the second quarter of twenty nineteen, there were approximately 13,000 commercial bankers and operators using PrecisionLender solutions. We believe this combination of incredibly talented people, complementary solutions and expanded data will enable us to design and deliver increasingly more innovative and valuable solutions. Now on to slide eight. With the acquisition of Cloud Lending, Q2 expanded from a North American centric company to a global business.
Adding PrecisionLender demonstrates our commitment to our global customers and employees as well. We are investing in businesses with complementary operating footprints. This will ensure that we create efficiencies during the international expansion. Additionally, we feel we will benefit from unified go to marketplace, client success planning and accelerated delivery. Ultimately, we believe the enhanced presence should create improved customer satisfaction with our combined global customers.
Now on to Slide nine. I'd like to spend a moment unpacking just how this acquisition augments our market opportunity. We have deliberately focused on land and expand go to market strategy. We have strong relationships with our customers and they rely on us for innovative new solutions and in particular, new solutions that drive revenue growth. Today, both PrecisionLender and Q2 have a presence in the community bank space, which we refer to as Tier two and Tier three, a natural place for Q2 to drive adoption of PrecisionLender solutions to our current customer base and vice versa.
In the regional bank space, PrecisionLender and Q2 are also represented. We believe when combined with our corporate banking solution, the Cloud Lending and PrecisionLender solution set is uniquely positioned to create substantial incremental inroads. Finally, when we think about global enterprise banks, a market that we have traditionally not approached with the Q2 platform, we believe both Cloud Lending and PrecisionLender are positioned for near term success in this massive market, given that they've already had success here. Moving to slide 10. Finally, a key driver for any acquisition in Q2 is cultural bid.
And we are more than impressed with the mission and cultural alignment we see with Carl, Ken and their team. PrecisionLender and Q2 share a common purpose, to help financial institutions use technology to compete and thrive in their markets. And even though we did not choose the exact same words, we absolutely share a common set of core values. The combined talent and complementary cultures we share excite me about what is possible as we bring our teams together. With that,
to introduce you to Carl Riedine, CEO and Co Founder of PrecisionLender. Carl is
a great leader, technologist and visionary, and we are thrilled at the opportunity to bring him, Co Founder Ken Garcia and the rest of the PrecisionLender team into the Q2 family.
Carl?
Thanks, Matt. Good morning and thanks for joining us today. Please turn to Slide 12. I'm honored to be here representing the 150 talented and passionate team members from PrecisionLender. Every single one helped us achieve this great milestone and I know I speak for our entire team when I say how excited we are to take the next step as a combined company with Q2.
Thanks everyone. I wanted to take a few minutes and introduce you to PrecisionLender so that you can better understand why we are so excited about the fit with Q2. We started the company in the February with quite literally a blank screen and a blinking cursor and a very simple mission, to help bankers price, negotiate and close better deals faster than ever before, to help them build stronger, broader, more profitable relationships with their clients so that they can build stronger brands for themselves and for their banks. We started that critical interaction between the banker and their client and we worked backwards to build a solution that could deliver on this mission. From inception, we built PrecisionLender as a modern cloud based API driven SaaS application targeting a critical point in the bank's value chain.
We placed a huge bet on the cloud. This was far from a certain bet in 02/2009, but this is a bet that has really paid off both for us and for our clients in terms of flexibility, agility, scalability, security and cost. We can onboard our clients and deliver value in a fraction of the time without placing strain on already taxed internal bank resources. We adopted a rigorous security first mindset. For many of our clients, we were the first meaningful cloud based SaaS application that they had ever purchased.
So we developed the documentation, the certifications, and the education that they needed to earn their trust. By doing all of this, we were able to build PrecisionLender not only to provide a superior SaaS solutions for sales coaching, pricing, and portfolio management, But in doing so, we were able to create a powerful and proprietary dataset, data that we use to power a virtuous cycle where the data from each deal can be used effectively to make each banker better on the next deal. Please turn to Slide 13. Believe it or not, many banks price and structure their commercial deals with little more than an Excel spreadsheet and many don't use anything at all. Our flagship offering, PrecisionLender, delivers a user experience that empowers commercial bankers with the information they need exactly when they need it so that they can negotiate honestly, helping them to earn and keep the trust of their most valuable customers.
In the end, we believe they create better deals for their customers and their bank, a win win. This is where we started but not where we stopped. Our clients would ask us for ways to extend PrecisionLender to provide richer, more personalized coaching to their bankers. So we created Andy. Andy sees every deal at the bank, what's winning, what's losing.
Andy sees what the best performing bankers do differently. Andy sees how relationships in the portfolio as a whole are evolving and alerts bankers of potential troubles and opportunities. Ultimately, delivers actionable insights for a deal like this with a relationship like this in a market like this. Here are the top actions that the banker can take to improve a deal and the relationship. Andy is a platform for delivering insights into PrecisionLender, into the bank's CRM, via email or almost any other digital channel.
Banks can build skills for Andy similar to how one can build skills for Amazon's Alexa. Andy's skills deliver data driven hyper focused bank and banker specific coaching directly where it can drive the most value. Lastly, PrecisionLender L3 is our data platform. All of the pricing data, the portfolio data, the relationship data and the behavioral data are captured and enriched with account level and relationship level profitability and then stored in a structured data lake over time. PrecisionLender L3 provides the data infrastructure necessary to gather the enriched data from within PrecisionLender, analyze that data using the latest tools and then act on that data via coaching delivered by Andy Skills.
Next to Slide 14. I thought it would be helpful to show you what Andy is and how she works for a banker. PrecisionLender is our pricing and negotiation solution seen in the background here. Andy, the forward image sits on top of PrecisionLender. Andy is always there throughout the lending negotiation process ready to provide in real time virtual coaching not only about what's impactful to the deal but also what is achievable for this client in this industry, in this market.
Andy can suggest changes to the deal terms and structure, highlight potential cross sell or upsell of other non credit products, what other bankers have been able to achieve on similar deal benchmarks as to what other banks have achieved in the same market. Andy is how we bring to life the loan relationship portfolio market data so that we can help bankers do better deals faster and positively impact their bottom line in the communities. Please move to Slide 15. PrecisionLender drives both improved efficiency and improved effectiveness. According to an analysis of FDIC data from December 2017 to 2018, banks using PrecisionLender grew their loans at 8.7% year over year.
They also grew their deposits at 7.6% year over year. Bottom line, banks using PrecisionLender have grown deposits and loans. On to Slide 16. The digital transformation process is an ecosystem. And together with Q2, we are positioned strategically throughout the Indian transformation ecosystem.
While digital interactions are the main engagement method for most customers, human interaction with banks continues especially on the commercial side of the bank. CRM is critical for forward leaning financial institutions and the legacy systems providers are not meeting the three sixty degree view requirements for doing business today. They simply can't deliver on the human digital engagement model prevalent today. At PrecisionLender in Q2, we are working as partners with leading CRM providers like Salesforce, Microsoft and others. We enrich their solutions with data around where the bank is generating profitability and returns.
In doing so, the data in the CRM becomes far more valuable and we believe we can drive increased adoption and retention. Because the vast majority of engagement is digital, Q2's leading UUX platform may be the perfect place to educate, inform and initiate credit offers for retail, SMB and commercial customers. As you can see both CRM and Q2's comprehensive digital banking platform naturally feed into intelligent data driven deal structuring and negotiation. This is where PrecisionLender brings tremendous value. At this point in the engagement life cycle of the customer, PrecisionLender acts as the brand of the bank, helping banks and bankers construct intelligent credit and non credit offers to customers.
As customers and or bankers determine the credit product is right for them, they can simply click and flow directly into loan application workflows powered by Q2's cloud lending platform. In the end, after a loan is underwritten and onboarded by the bank, that loan along with the entire relationship and its profitability and returns will become available in the PrecisionLender L3 solution where the bank can accurately determine its overall impact on the bank's profitability. Moving on to Slide 17. The combined data of Q2 and PrecisionLender is powerful. PrecisionLender solutions are currently helping banks price greater than $1,700,000,000,000 in loans annually and include data from a commercial book of business currently covering over $680,000,000,000 in assets.
For reference, the largest banks in The United States typically only have commercial loan assets around $300,000,000,000 each. Q2 has petabytes of retail and small business and commercial banking transaction data covering over 14,000,000 end users. Together, we will have access to financial dataset with scale, scope and quality necessary to create valuable new innovation for our customers. Over time, by continually enriching data using our applied analytics platform, we will generate more precise insights and real time offers used by Andy or by Q2's intelligent marketing platform, SMART. This combination of rich financial and behavioral data will enable us to design and deliver increasingly more innovative solutions and valuable experiences.
Now I'd like to hand the call over to Jennifer Harris, CFO of Q2. Jennifer?
Thanks, Carl. I'd like to quickly walk you through the high points of this transaction. This is an all cash offer funded entirely with the cash that we have on our balance sheet. The acquisition is subject to U. S.
Antitrust approvals, which we expect to take approximately four weeks to complete. Therefore, we anticipate the acquisition will close during Q4 of this year. We expect the financial impact of this transaction to be accretive to revenue growth in 2020 given PrecisionLender's higher relative revenue growth. And finally, we anticipate one time integration costs of approximately $6,000,000 to $8,000,000 over the next two years and acquisition related costs of approximately $5,000,000 As we turn to Slide 20, we are very excited about PrecisionLender and how together we will continue to drive shareholder value. PrecisionLender is a high growth business with a substantial TAM and great momentum with customers around the globe.
Like Q2, PrecisionLender has significant recurring revenue with a mix of software and services in line with those of Q2. PrecisionLender's model yields rapid time to revenue and attractive margins. Also consistent with Q2, given the mission critical nature of the technology and its value to our customers, PrecisionLender's gross revenue churn is very low, less than 5%. PrecisionLender contracts are multi year and usually include upfront payments, supporting rapid cash flow generation as each new customer is added to the portfolio. In addition, PrecisionLender continues to innovate.
And as new expansion modules are added over time, we believe we will create significant upsell opportunities with existing customers and a more robust offering for new customers. Our existing Q2 customers continue to look for ways to drive value in their business, and we expect that the cross pollination of these additional solutions into our customer base will continue to drive value for both Q2 and our customers. Finally, we anticipate modest cost synergies, primarily related to infrastructure optimization and complementary global operations. Moving on to Slide 21. In conclusion, the acquisition of PrecisionLender significantly enhances our ability to create value for our customers, employees and shareholders alike.
Their cloud native SaaS model will accelerate time to value for our customers while creating operational efficiencies in the business. Together with Cloud Lending, PrecisionLender will substantially improve our position within the commercial bank value chain by helping them price and underwrite better loans faster. Our access to a financial dataset with the scale, scope and quality necessary to create valuable new innovation for our customers has never been better. We continue to be focused on expanding our TAM and are excited about the new markets and geographies we will have access to with the addition of PrecisionLender to our portfolio. And finally, we believe the strong financial profile of this business will bring lasting benefits to the financial performance of the combined business, driving significant growth opportunities for customers, employees and shareholders.
That concludes our prepared remarks. And I'll now turn the call over to the operator for your questions.
You. Your first question comes from Terry Tillman from SunTrust Robinson Humphrey. Your line is open.
Yeah, thanks for taking my two part question. Guess and congrats on the acquisition. The first part of the question just relates to any more color on its run rate for the PrecisionLender business and how to think about it going into next year? And then Carl, I would love to get your perspective on what does Q2 provide that you weren't able to do on your own? It's kind of a revenue synergies kind of question, what they bring to the table.
Thank you.
So Terry, I'll take the first part of that question and turn it over to Carl. But obviously PrecisionLender is a private company and we've just signed the definitive. This deal hasn't closed yet. So we're limited right now on what we're going to disclose from a financial perspective. But I can tell you that PrecisionLender is growing significantly faster than Q2 and we anticipate this deal will be immediately accretive to revenue growth.
And we'll provide more information on financial profile after the deal closes.
Terry, this is Karl. Thanks for the question. When we look through the competitive process, had quite a few folks we had talked to. And when we make decisions here, we kind of use what we call the four question test. How is it going to drive value for our customers, new prospects?
How is it going to drive value for existing prospects? How is it going to make us more efficient at doing one and two? And then fourth is, is it going to give us a great culture where we can attract great people who are good at one, two and three? And on every one of those four fronts, Q2 kind of hit the mark and kind of excelled and we're really lucky to be a part of it. As far as the question around revenue synergies, particularly the complementary nature of our customer bases and how our similar go to market strategy would land and expand and the ability to cross sell different products, think will be really huge in that.
And then also our ability to kind of overlap in the global footprint we have. The leadership we have in different areas seem to fit really well together and seem to give us a really efficient way of going after those global banks as well. Thanks, Terry.
Your next question comes from Tom Roderick from Stifel. Your line is open.
Hey, good morning. Thanks for taking my question. So I'm curious looking at the number of deals here and Matt or Karl, I'll let you guys decide who wants to handle this one, but 150 customers. Can you speak to the overlap in the installed base today? And as you look at the opportunity in Europe, would love to understand how much more investment you think you need to expand and go after that market more aggressively?
How many customers do you have in Europe today? And how big do you think that market is? Thanks.
Yes. So Tom, on the customer overlap, we have a little over a dozen that overlap between the Q2 platform and Precision. So there's a tremendous opportunity for us to go cross sell. I mean, thing started with a partnership and we saw a huge opportunity with that. And so there's a lot of go get for us on both sides.
Precision also brings us into some of the largest banks in the world, which is where we don't have a footprint today, as we mentioned in the call earlier. As far as Europe goes, they have an office there, we have an office there, there's some nice overlap. And I think as we go through the process, we're going to find a lot of synergies between their pipeline and our pipeline and how we're to go execute on the two of those. We don't have the investment amount yet, but clearly, we're going to the size of the European office is going to grow more as well as there's also a nice fit in Australia where we have a highly functioning office for the cloud team and Precision will be able to piggyback with that and then leverage those relationships as well as what we have in Asia already.
Your next question comes from Sterling Auty from JPMorgan. Your line is open.
Hey, guys. This is Jackson Ader on for Sterling this morning.
Good morning, Jackson.
Jennifer, the good morning. The contracts, so collecting, upfront on multiyear contracts, are can you just give us some color on maybe what the contracts are based on? Is it, number of users or seats? And is there any transactional nature to these contracts? And then how would though if there is, how would that be kind of recognized into revenue or collected?
Yes. So their typical contracts are three years in length and they have a very strong track record of collecting multiple years upfront in the community mid tier and regional space. And as they've moved up market into the enterprise deals, they typically collect at least a year in advance on those. The pricing is typically asset based, based on the size of the financial institution. And we expect to continue that in the near term.
And so I think with the upfront collections that they've been able to get and their traction in the enterprise market, we would expect that this will be accretive to cash free cash flow in the near term.
Thanks, Jack.
Your next question comes from Brad Berning from Craig Hallum. Your line is open.
Good morning. And again, congrats on the strategic fit here. Maybe you can get a little bit deeper into what you saw in the partnership from an interest level and what kind of pipeline that caused you to want to shift from a partnership approach to actually the controlling kind of approach to this? Just wondering what you were hearing directly from feedback from customers and what that pipeline might already look
like? Well, we were obviously, just to get into the partnership, very impressed with Carl and Ken and the team they had assembled and the culture and then the technology. And then as we began to talk to our customers and our prospects, the appetite for this was off the charts. And then as we began to dive deeper into the opportunity to leverage these two companies together, their experience, we're talking about we're able to drive more revenue to our customers, which is always a big win, plus the operating efficiency they get out of the platform and the risk management that we can provide them as well. So everything just kind of came together and we're just the opportunity for us, it was two plus two equals five for us.
And it just was a no brainer. And as we got to know each other, the cultures are so aligned and the team and then the depth of knowledge and experience in this area was so unique that it kind of felt like it was a perfect fit for us. Thanks, Brad.
Your next question comes from Matt Hedberg from RBC Capital Markets. Your line is open.
Hey, it's Dan Bergstrom for Matt Hedberg. Thanks for taking our question. So looking at the amount and trajectory of loans priced by PrecisionLender for clients, it's really impressive $1,700,000,000,000 this year estimated almost triple versus last year double from 2017. Could you just perhaps talk about what's driving that growth, number of customers usage across those customers, the right customers moving up market, etcetera? I'll take that if that's okay.
All of the above. Is we track that on a quarterly basis, just the volume of loans priced in PrecisionLender and it's continued to kind of almost double every six months or so over the life of the company and continues to grow as we add. We've steadily moved up market to larger and larger enterprises to global banks who price bigger volumes of bigger deals. And we also deepen our penetration within existing accounts as well. And our customers tend to grow their loans faster, which means they're typically more active in the market as well.
So we see it on all fronts. Best answer to that is exactly all of the above.
Thanks, Dana.
Your next question comes from Joseph Vafi from Canaccord. Your line is open.
Hi, guys. Good morning. I know we'll get more details on the financial side and I know you said it's accretive to revenue growth. I was wondering on the gross margin side, if you see that accretion there as well. And then what's your appetite now for M and A after this relatively large deal?
Thanks.
Let me take the last part. I mean, we're after we close this deal, it's 100% focused on integration of these products and the teams and making sure that we continue the momentum that Precision has, plus we're still working on cloud, integrating these systems together in 2020 and continuing to invest in this huge opportunity that we have in front of us, because we just take the gross margin.
Yes. On the margins, as Precision's lenders business scales and we work through the purchase accounting adjustments that we'll have associated with this transaction, we expect that it will be accretive to margins in the near future. Given their solution as a pure cloud based multi tenant solution, it does have a higher gross margin profile than Q2's digital banking platform. And therefore, as it grows to contribute a larger portion of our overall total revenue, it will provide opportunities for margin expansion.
Thanks, Joseph.
Your next question comes from Brett Huff from Stephens. Your line is open.
Good morning. Congrats on the deal and thanks for taking the question. I'd like to focus on the enterprise level deals. I think you said you had about 150 banks and financial institutions. I didn't think you said sort of what the number of larger banks, however you want to define that was and wondered if you could disclose that.
And if so or if not, can you give us a sense of how the sales process goes with those larger banks? Is this typically a very targeted sort of sales of the larger banks? Are they looking for a solution relative to spreadsheets? And kind of what's the competitive offering that you're replacing? Thanks for the time.
Yes. So on the we're not disclosing the particular number of enterprise deals, but I'll let Karl handle the question on the sales process for the enterprise accounts.
Yes. So the sales process for enterprise accounts is incredibly targeted. There's only I like to joke, there's only 20 top 20 banks in the world, 50 top 50, right? So the math on that's pretty easy. So for each one of them, we actually develop a very customized playbook of how we interact with them, how we talk to them, how we understand what they're trying to achieve and how we align the product and the sales process to help them achieve their strategic goals.
The great thing is we have a product that really helps them do that in terms of how do we coach their frontline salespeople and their commercial bankers to actually align the acquisition process of assets into the bank and the non credit revenue into the bank with exactly what their strategic needs. We spend a lot of time in the sales process, it's highly targeted, highly customized on the enterprise side. As you go down to the CMR side, it becomes different. It becomes more of more similar, right. So you can actually see some efficiencies there.
But if you the general breakdown of our client base right now kind of matches the breakdown of banks in The U. S, except we probably have an over I think it's on the one of the first slides, we have kind of more than our fair share in the kind of 5,000,000,000 to $50,000,000,000 banks where we have quite a few in that range.
Thanks, Brett.
Your next question comes from Mayank Tandon from Needham and Company. Your line is open.
Hey, good morning. This is actually Kyle Peterson on for my own. Thanks for taking the questions.
Just wanted to see if
you guys could talk a little more about some of the cross selling plans and efforts given the relatively little client overlap. Is this something you guys might see as a bigger opportunity to expand the PrecisionLender offerings down into some of the existing core digital banking product clients? Or do you see an opportunity to maybe expand Q2's kind of legacy digital banking offering in PrecisionLender's clients? Or is it little bit of both? Or just a little bit of color would be helpful.
Yes, Kyle. I think you're going to see that the PrecisionLender product from the partnership we signed in May is going to be a nice fit for our customers on the platform side of the business. Remember, we've got a lot of corporate customers out there, which on the commercial lending side, this is the type of product they're looking for. So cross selling PrecisionLender into the Q2 platform base makes a lot of sense. There's a lot of synergies obviously between Cloud Lending and PrecisionLender on whether it's workflow, pricing.
There are a lot of different opportunities there to go both ways on that side. And then from the ANDI product that we talked about, we think there's an opportunity to use that on the Q2 Corporate Banking side. So there's a lot of cross pollinization opportunities, especially when you only have 20 close to 20 customers that overlap in the base. So we have fortunately been able to put some of those plans together through the partnership. But now that we're one company, we're really going to put a lot of energy into how we're to go cross sell, integrate and drive more of these products into our existing customers as well as win new ones.
Thanks, Kyle.
Your next question comes from Peter Heckmann from D. A. Davidson. Your line is open.
Hi, Pete. Good morning.
Thanks for taking my question. With this deal, you're buying a private company. The likelihood of it being rejected on an antitrust basis is almost nil. There doesn't seem to be any reason prohibiting you from giving us some sort of revenue estimate so the financial community can assess what type of valuation we're talking about. I think you need to be more forthcoming here when you're doing an acquisition that's 3x larger than the acquisition you've ever done before.
Can you give us some sort of idea revenue wise, earnings wise, how we should evaluate this deal beyond just the general fit?
Yes, Pete, appreciate your desire to get more information out of it and we certainly do understand that. Would say that if you look at transactions, we have a Board member that was on Bizarre Voice that did the transaction and didn't go through the appropriate channels. And there was a valuable lesson learned in that experience. And so it may take thirty days or forty five days to go through this process. But with $1,700,000,000,000 in loans and 14,000,000 account holders and all the data we have, we think we're following the appropriate procedures and the safest way to do this.
And we will share all that information at the time that we can. But short circuiting this process is not a very wide decision on our part. We can appreciate your desire to get that information. And as we've always done, as soon as we get it, we'll
share it with you, we'll
be transparent, and we'll get that information in your hands as quickly as we can. But we're talking hopefully in thirty to sixty days we'll have it done and through the appropriate channels and be safer and better for it in the long run.
I would also point out that we do have confidentiality obligations within the definitive agreement that we have to honor as well.
Next question comes from Tim Willey from Wells Fargo. My
question, I think, sort of follows on one of the two prior ones just around the cross selling and sales. I guess, Matt, you think about the evolution of the product set and your sales organization, I guess, across bank or non bank and the touch points you have within those banks, how do you think about the sales management and the organization and potentially even going farther up into the executive suite to talk about much broader solution sets that Q2 can bring to a bank as opposed to maybe just a couple of years ago when it's probably a little bit more point of solution sort of around the consumer banking side, and now you're really touching a lot of different places across the bank. Just any thoughts there, any work to be done, or things that you're planning on sort of tweaking and addressing with this transaction?
No, I think it's a
good question. I think one of the things I've noticed probably over the last twelve months is there's significantly more senior engagement on the decisions just on the platform side of the business, whether it's for digital banking, retail, commercial, cloud lending, Q2 Open. I think the executives of the financial institutions we're dealing with are beginning to see that Jamie Dimon and people like that are heavily involved in the technology side. And so we can go in and drive the value of data and the meaningfulness of the experiences that they have. And then when you add PrecisionLender, now we start talking about how we can help them make more money.
And so the combination of making them more efficient, driving more revenue through the business, helping them with risk management, driving meaningful experiences to the account holders, that's what they want to talk about. And as we drive this messaging outwardly through marketing and through our sales channel, there's going to be more and more senior level engagement. And our sales reps and teams and relationship managers are up to that as well as our senior leadership team. So the importance of this channel and this technology is just becoming critical. So as the transformation happens, we think we have the best set of technology to go solve those problems and we're in a really good spot.
So good question and thank you very much. Next question?
Your next question comes from Alex Klar from Raymond James. Your line is open.
Thanks. Following up on an earlier question, I know the focus for PrecisionLender has been on the commercial lending side and that seems like it is the biggest opportunity. But could you just talk about if there's any applicability of the technology, particularly on the Andy piece to offer it as part of a consumer lending offering or anywhere else inside your existing business?
This is Carl. I can talk about a couple of things. One is the core of our business has always been commercial. We also have an ability to manage pricing in a volume sense as well for retail and even down to consumer stuff as well. It's just the core of our business has always been commercial.
That's been the anchor for what we do. So I think there's opportunity across the board in pricing profitability management and the ability to see the evolution of the portfolio and its profitability. With Andy, we built Andy as a horizontal platform that we surface within PrecisionLender. We're already being asked by customers. One of the things that kind of led us to this decision to think about finding the right partner was we had customers ask us to pull to surface Andi in other areas of the bank and other applications within the bank, particularly within their origination workflow.
And so the idea of how you deliver coaching, digital coaching to the enterprise in the moment to drive better, more efficient, more effective outcomes is something that is we built to do that and we wanted to make sure we had as many avenues as we could to realize Andy in those particular environments. I think there is some opportunity as well to use it on the consumer side for financial coaching to individual consumers and small businesses about what they might think about doing differently. But I think that's down the road for us to work through. Thanks, Alex.
Your next question comes from Bob Napoli from William Blair. Your line is open.
Hey, guys. It's Chris Kennedy filling in for Bob. Thanks for taking the questions. Just wanted to go more into the expanded TAM and how you get to that $2,000,000,000 number. Thanks a lot.
Yeah. If you look at the $2,000,000,000 TAM expansion, we believe it's heavily weighted towards the existing regional community financial institution customers. But there's a lot of over half of it is incremental opportunity in the global financial institutions where they've been moving up market and total assets are greater than $50,000,000,000 We'll dig in and deconstruct it further, but we feel very confident in the fact that there's a lot of incremental expansion above and beyond the regional community space that we've historically operated in.
Thanks, Chris.
Your last question comes from Arvind Ramnani from KeyBanc. Your line is open.
Hey, thanks for fitting me in. Matt, you made some pretty good acquisitions in the past year, year and and a you're getting some really good talent from these acquisitions. Can you talk a little bit about kind of what you're doing to retain the talent? I mean, I'm sure there's some kind of three year contracts to kind of retain them. But more from a work perspective, how are you making sure some of the senior folks on the team really stay engaged and kind of keep pushing the Q2 story forward?
Yes, Arvind, it's a great question. I'm here in Cary, North Carolina today with a lot of the staff here. And I think a lot of people think it's about money and how you do that. It's really about do you have a vision and a mission that you're trying to accomplish and can you connect those people with what they do every day to have a difference in the world and in the financial services world? And so we spend a lot of time on culture and energy.
That's one of the things that I think we can learn a lot from PrecisionLender because they're very passionate about helping financial institutions compete. So we spend a lot of time on that and we think ultimately we have not a secret formula, but we do think that putting time and paying attention to it and thinking about what human beings want out of a company and what it means is important and it differentiates you. I don't I think handing stock options and pay to people is short lived. I think we've done a great job of driving a culture where people feel engaged and empowered to do things. And there's no difference with PrecisionLender.
As we've said, that was as big a part of the deal as the technology was. So we're going to continue to engage with employees and create a culture where they can grow professionally and take on the challenges that solve big problems every day. So thank you, and thanks, everybody, for joining us on the call today. We look forward to the earnings call in November, and hope everybody has a great week.
This concludes today's conference call. Thank you for your participation. You may now disconnect.