QTWO earnings analysis
What we found in QTWO's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Q2 Holdings (QTWO) reported a strong Q1 2026 with revenues of $216.5 million, surpassing both the prior quarter and analyst estimates. While EPS came slightly below expectations at $0.63, growth in revenue and improved margins reflect ongoing operational efficiency and customer expansion efforts.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Growth Year-Over-Year
- Revenue increased to $216.5 million, up 14% from $190 million in Q1 2025.
- Operating Margin Improvement
- Operating margin improved to 8.2%, up from 5.5% in the previous quarter.
- Strong Free Cash Flow
- Generated free cash flow of $38 million, maintaining healthy cash generation.
- Customer Account Expansion
- Total Customer Accounts increased to 500 for Digital Banking solutions, demonstrating market penetration.
- Subscription ARR Growth
- Subscription ARR reached $802.3 million, up from $702.4 million year-over-year.
- Net Revenue Retention Rate Increased
- Net revenue retention rate improved to 113% for the year ended December 31, 2025.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Litigation Risks Persist
- Ongoing legal proceedings may impact financial performance, though no substantial claims are currently pending.
- Market Volatility Exposure
- Potential market instability could affect customer spending on technology solutions.
- Interest Rate Risks
- Outstanding debt of $304 million may expose the company to interest rate fluctuations.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.63
- Gross margin
- 55.4%
- Operating margin
- 8.2%
What they said about what is next.
Guidance for Q2 2026 revenue projected at $214 million to $218 million.
The filing reads better than the one before it.
What came before.
- 10-K · February 11, 2026
- Q2 Holdings presents a clear SaaS-driven strategy centered on its digital banking platform and adjacent offerings (Helix, risk & fraud, digital lending) with scale in financial institutions: more than 1,200 customers,…
- 10-Q · July 30, 2025
- Q2 Holdings demonstrated strong financial performance in Q2 2025 with significant increases in revenue and profit compared to prior periods, indicating a positive growth trajectory. Revenue reached $195.15 million, a…
- 10-Q · May 7, 2025
- Q2 reported revenue of $189.735M for the quarter ended March 31, 2025, up $24.227M (14.6%) year-over-year, with gross profit of $100.990M and gross margin expanding to ~53.2%. Operating income turned positive at $2.189M…
- 10-Q · November 6, 2024
- Q2 delivered another quarter of revenue and margin improvement: revenues were $175,021 (three months ended September 30, 2024) and gross margin expanded to ~50.9%. Operating loss narrowed to $(12,800) (‑7.3% of revenue)…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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