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Earnings analysis · 10-Q

QTWO earnings analysis

Filed April 29, 2026 · Our reading of the company's report

The latest report

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…

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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.

Read the original on SEC.gov

Gross and operating margin

How much of each revenue dollar the business keeps.

55% Gross margin Operating margin Aug 2023 Apr 2026

One point per quarterly or annual filing. Both margins are shares of that report's revenue.

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $45 Operating expenses $47 Left as operating profit $8

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

How we read each report

Our analysis across the last few reports.

Read as bullish Read as bearish Aug 2023 Apr 2026

Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.

Reported figures

Earnings per share
$0.63

What stood out

  • 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.

What to watch

  • 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.

Management's outlook

Guidance for Q2 2026 revenue projected at $214 million to $218 million.

Earlier filings 4

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 itself. Analysis can contain errors; check the source document for full context.