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. After the speaker's 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 you 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-K 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 operative 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 Ryden, 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. Let me start with an introduction of the transaction and our strategic rationale for the 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 90 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.
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 billion to our current TAM. Finally, the relatively short time to value and SaaS infrastructure of PrecisionLender's 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 and offices around the globe, serving roughly 150 customers today. PrecisionLender solutions are currently helping banks price greater than $1.7 trillion 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 2019, 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. We feel we will benefit from unified go-to-market plays, client success planning, and accelerated delivery. We believe the enhanced presence should create improved customer satisfaction with our combined global customers. 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 2 and tier 3, 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 at Q2 is cultural fit, 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. 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, I would like to introduce you to Carl Ryden, 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 spring of 2009 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 at that critical interaction between the banker and their client. 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 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. We developed the documentation, the certifications, and the education that they needed to earn their trust.
By doing all this, we were able to build PrecisionLender not only to provide a superior SaaS solution for sales coaching, pricing, and portfolio management, but in doing so, we were able to create a powerful and proprietary data set, 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. We created Andi. Andi sees every deal at the bank, what's winning, what's losing. Andi sees what the best-performing bankers do differently. Andi sees how relationships in the portfolio as a whole are evolving and alerts bankers of potential troubles and opportunities. Ultimately, Andi 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. Andi 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 Andi, similar to how one can build skills for Amazon's Alexa. Andi 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 Andi Skills. Next is slide 14. I thought it would be helpful to show you what Andi is and how she works for a banker. PrecisionLender is our pricing and negotiation solution, seen in the background here.
Andi, the forward image, sits on top of PrecisionLender. Andi's 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. Andi can suggest changes to the deal terms and structure, highlight potential cross-sell or up-sell of other non-credit products, what other bankers have been able to achieve on similar deals, benchmarks as to what other banks have achieved in the same market. Andi 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 end-to-end 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 360-degree view requirements for doing business today. They simply can't deliver on the human digital engagement model prevalent today. At PrecisionLender and 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 lifecycle of the customer, PrecisionLender acts as the brain 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 $1.7 trillion in loans annually and include data from a commercial book of business currently covering over $680 billion in assets. For reference, the largest banks in the U.S. typically only have commercial loan assets of around $300 billion each.
Q2 has petabytes of retail and small business and commercial banking transaction data covering over 14 million 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 used in our applied analytics platform, we will generate more precise insights and real-time offers used by Andi or by Q2's intelligent marketing platform, Q2 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. Finally, we anticipate one-time integration costs of approximately $6 million-$8 million over the next two years and acquisition-related costs of approximately $5 million. 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. 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 data set 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. 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.
Thank you. If you would like to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. Due to time constraints, we ask that you please limit yourself to one question. Thank you. Please stand by while we compile the Q&A roster. Your first question comes from Terry Tillman from SunTrust Robinson Humphrey. Your line is open.
Yeah, thanks for taking my 2-part question, I 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. 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.
Terry, I'll take the first part of that question, then turn it over to Carl. 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. I can tell you that PrecisionLender is growing significantly faster than Q2, and we anticipate this deal will be immediately accretive to revenue growth. We'll provide more information on financial profile after the deal closes.
Terry, this is Carl. Thanks for the question. When we look through the competitive process, we had quite a few folks we had talked to. 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? Then fourth is it going to give us a great culture where we can attract great people who are good at one, two, and three? 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 with land and expand and the ability to cross-sell different products, I think will be really huge in that. 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. I'm curious, looking at the number of deals here, and Matt or Carl, I'll let you guys decide who wants to handle this one. 150 customers. Can you speak to the overlap in the installed base today? Then, 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.
Yeah. Tom, on the customer overlap, we have a little over a dozen that overlap between the Q2 platform and Precision. There's a tremendous opportunity for us to go cross-sell. This thing started with a partnership, and we saw a huge opportunity with that. 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. 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 going to go execute on the two of those. We don't have the investment amount yet, but clearly the size of the European office is going to grow more. 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.
Thanks, all.
Your next question comes from Sterling Auty from JPMorgan. Your line is open.
Hey, guys. This is Jackson, the aide on for Sterling this morning.
Morning, Jack.
Jennifer, good morning. The contracts, so collecting upfront on multi-year contracts, can you just give us some color on maybe what the contracts are based on? Is it number of users or seats? Is there any transactional nature to these contracts? If there is, how would that be recognized then to revenue or collected?
Yeah. Their typical contracts are three years in length, and they have a very strong track record of collecting multiple years up front in the community mid-tier and regional space. 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. We expect to continue that in the near term. 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 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?
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 the technology. As we began to talk to our customers and our prospects, the appetite for this was off the charts. 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. Everything just kind of came together, and the opportunity for us, it was two plus two equals five for us, and it just was a no-brainer.
As we got to know each other, the cultures were 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 Matthew Hedberg from RBC Capital Markets. Your line is open.
Hey, it's Dan Bergstrom for Matt Hedberg. Thanks for taking our question. Looking at the amount and trajectory of loans priced by PrecisionLender for clients, it's really impressive, $1.7 trillion 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, et cetera?
Yeah. I'll take that if that's okay.
Please.
Yeah. All of the above. 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. We also deepen our penetration within existing accounts as well. Our customers tend to grow their loans faster, which means they're typically more active in the market as well. We see it on all fronts. The best answer to that is exactly all of the above.
Thanks, Dan.
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. What's your appetite now for M&A after this relatively large deal? Thanks.
Let me take the last part. After we close this deal, it's 100% focus on integration of these products and the teams and making sure that we continue the momentum that Precision has. 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. You can take the gross margin.
Yeah. On the margins, as PrecisionLender's 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. 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.
Thanks, Brett.
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 what the number of larger banks, however we want to define that was, and wondered if you could disclose that. 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 sale to the larger banks? Are they looking for a solution relative to spreadsheets, and what's the competitive offering that you're replacing? Thanks for the time.
Yeah. We're not disclosing the particular number of enterprise deals, but I'll let Carl handle the question on the sales process for the enterprise accounts.
Yeah. The sales process for the enterprise accounts is incredibly targeted. I like the joke, there's only 20 top 20 banks in the world, 50 top 50, right? The math on that's pretty easy. 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 similar, right? You can actually gain some efficiencies there. The general breakdown of our client base right now kind of matches the breakdown of banks in the U.S., except we probably have, I think it's on one of the first slides. We have more than our fair share in the kind of $5 billion-$50 billion banks, where we have quite a few in that range.
Thanks, Brett.
Your next question comes from Mayank Tandon from Needham & Company. Your line is open.
Hey, good morning. This is actually Kyle Peterson on for Mayank. 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 into PrecisionLender's clients, or is it a little bit of both? Just a little bit of color would be helpful.
Yeah, 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. 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's a lot of different opportunities there to go both ways on that side. From the Andi product that we talked about, we think there's an opportunity to use that on the Q2 corporate banking side.
There's a lot of cross-pollination opportunities, especially when you only have close to 20 customers that overlap in the base. We have fortunately been able to put some of those plans together through the partnership. Now that we're one company, we're really going to put a lot of energy into how we're going 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.
Hey, 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 three times larger than any 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?
Yeah, Pete, I appreciate your desire to get more information out of it, and we certainly do understand that. I would say that if you look at transactions, we have a board member that was on Bazaarvoice that did a transaction and didn't go through the appropriate channels, and there was a valuable lesson learned in that experience. It may take 30 days or 45 days to go through this process. With $1.7 trillion in loans and 14 million account holders and all the data we have, we think we're following the appropriate procedures and the safest way to do this. We will share all that information at the time that we can. Short-circuiting this process is not a very wise decision on our part. We can appreciate your desire to get that information.
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. We're talking hopefully in 30-60 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.
Your next question.
I see.
Your next question comes from Timothy Willi from Wells Fargo. Your line is open.
Yeah, thank you, and good morning. My question, I think, sort of follows on one of the two prior ones just around the cross-selling and sales. I guess, Matt, as 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 was probably a little bit more of a point 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 12 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. We can go in and drive the value of data and the meaningfulness of the experiences that they have. When you add PrecisionLender, now we start talking about how we can help them make more money.
The combination of making them more efficient, driving more revenue through the business, helping them with risk management, driving meaningful experiences with account holders, that's what they want to talk about. As we drive this messaging outwardly through marketing and through our sales channel, there's going to be more and more senior-level engagement. Our sales reps and teams and relationship managers are up to that as well as our senior leadership team. The importance of this channel and this technology is just becoming more and more critical. 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. Good question, and thank you very much. Next question.
Your next question comes from Alex Clark 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. Could you just talk about if there's any applicability of the technology, particularly on the Andi piece, to offer it as part of a consumer lending offering or anywhere else inside your existing business?
Carl, you want to talk about it?
This is Carl. I can talk about a couple 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. 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 Andi, we build Andi 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 asking us to surface Andi in other areas of the bank, in other applications within the bank, particularly within their origination workflow. The idea of how you deliver digital coaching to the enterprise in the moment to drive better, more efficient, more effective outcomes is something that We built Andi to do that, and we wanted to make sure we had as many avenues as we could to realize Andi 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. 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 Cris 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 billion number. Thanks a lot.
Yeah. If you look at the $2 billion TAM expansion, we believe it's heavily weighted towards the existing regional community financial institution customers. There's a lot of over half of it is incremental TAM opportunity in the global financial institutions, where they've been moving upmarket and total assets are greater than $50 billion. We'll dig in and deconstruct it further, 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've made some pretty good acquisitions in the past year and a half, and 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'm sure there's some kind of three-year contracts to kind of retain them. 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?
Yeah, 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? 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.
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 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. 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. 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.