Q2 Holdings (QTWO) Q3 2026 Earnings Report
MX:QTWO Q3 2026 EPS Results
- Actual EPS
- MXN 13.91
- Consensus EPS
- MXN 13.44
- Beat/Miss
- Beat by +MXN 0.47
- One Year Ago EPS
- MXN 12.31
MX:QTWO Q3 2026 Revenue Results
- Actual Revenue
- MXN 4.24B
- Expected Revenue
- MXN 4.16B
- Beat/Miss
- Beat by +MXN 85.26M
- YoY Revenue Growth
- +11.93%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/28/2026
- Time
- After Close
- Conference Call
- Wednesday, October 28, 2026
MX:QTWO Upcoming Earnings
Q2 Holdings's next earnings date is estimated for February 17, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
MX:QTWO Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive. Q2 delivered revenue and adjusted EBITDA above guidance, record gross margin and adjusted EBITDA, substantial year-over-year free cash flow growth, raised 2026 guidance, and reiterated a favorable 2027 framework. Bookings, renewals, credit union wins, fraud, relationship pricing, Innovation Studio, and AI engagement were all described positively. The main qualifications were pressure in discretionary nonsubscription services, higher planned investment affecting fourth-quarter profitability, uncertain AI economics at scale, and slow Helix fintech-market traction.
Company Guidance
Q2 Holdings forecast fourth quarter revenue in the range of $226 million to $230 million and raised full year 2026 revenue to the range of $888 million to $892 million, representing year over year growth of approximately 12%; it expects full year 2020 subscription revenue growth of approximately 14.5%, and non subscription revenue to decline slightly year over year for the fourth quarter and to be roughly flat for the full year. Fourth quarter adjusted EBITDA is forecast in the range of $62.4 million to $65.4 million, while full year 2026 adjusted EBITDA was raised to the range of $253 million to $256 million, representing approximately 28.6% of revenue at the midpoint and approximately 500 basis points of adjusted EBITDA margin expansion for the full year. Q2 is reiterating its full year subscription revenue growth outlook of 12.5% to 13% for 2027 and adjusted EBITDA margin expansion of 150 to 200 basis points, expects to finish 2026 at approximately a Rule of 43, and continues to expect free cash flow conversion of at least 90% for the full year.
- Co-CEO Leadership AppointmentQ2 Holdings appointed CFO Jonathan A. Price as co-CEO alongside Matthew Flake. Price will continue serving as CFO while the company searches for a successor, and he will join the board of directors. Management described the structure as supporting long-term continuity and said operations will remain business as usual.
- Strong Third-Quarter Financial PerformanceThird-quarter revenue was $225.8 million, up 12% year over year and 3% sequentially. Adjusted EBITDA was $67.8 million, or 30% of revenue, and free cash flow was $55 million. Revenue and adjusted EBITDA finished above the high end of guidance.
- Subscription Revenue and Recurring Revenue GrowthSubscription revenue grew 14% year over year and 3% sequentially, reaching 83% of total revenue. Total ARR grew 11% year over year to $989 million, while subscription ARR grew 13.5% year over year to $846 million. Growth was driven by new customer go-lives and expansion with existing customers.
- Backlog Growth and Strong BookingsEnding backlog was $2.8 billion, up $248 million year over year from $2.5 billion, representing 10% growth, and up $5 million sequentially. The year-over-year increase was driven by new, expansion, and renewal bookings. The company reported seven total Tier 1 and enterprise wins, along with meaningful Tier 2 activity.
- Credit Union Digital Banking WinsCredit unions were a notable part of digital banking success, including an approximately $3 billion credit union that selected Q2's digital banking platform in the company's largest deal of the quarter by contracted recurring revenue. An approximately $10 billion credit union also selected Q2's commercial digital banking platform to support its commercial banking expansion.
- Expansion Across Risk, Fraud, and Relationship PricingA bank with more than $60 billion in assets expanded its relationship with Q2 by adding multiple risk and fraud capabilities, including SentriX products, an AI-driven account takeover solution, and user activity monitoring. The company also reported bookings contributions from digital banking, risk and fraud, and relationship pricing.
- Record Gross Margin and EBITDA ProfitabilityNon-GAAP gross margin was 62.6%, up 470 basis points from 57.9% in the prior-year period and approximately 30 basis points sequentially. Adjusted EBITDA increased 39% year over year from $48.8 million and 8% sequentially from $62.8 million. Adjusted EBITDA margin expanded to 30%, up approximately 580 basis points year over year and approximately 140 basis points sequentially.
- Improved Cash Generation and Debt-Free Balance SheetCash flow from operations was $65 million, up from $46 million in the prior-year period. Free cash flow of $55 million increased 48% year over year and represented approximately 81% of adjusted EBITDA. Cash, cash equivalents, and investments increased to $123 million from $106 million in the prior quarter, and the company remained debt free after retiring its convertible notes in June.
- Share Repurchases and Capital Allocation FlexibilityQ2 repurchased approximately $39 million of stock during the quarter and had approximately $336 million remaining under its share repurchase authorization at quarter end. Management said it remains focused on maintaining flexibility for organic investment, potential inorganic opportunities, and disciplined share repurchases.
- Raised Full-Year 2026 GuidanceThe company raised full-year 2026 revenue guidance to $888 million to $892 million, representing approximately 12% year-over-year growth. Full-year adjusted EBITDA guidance was raised to $253 million to $256 million, representing approximately 28.6% of revenue at the midpoint and approximately 500 basis points of full-year adjusted EBITDA margin expansion.
- Positive 2027 Financial FrameworkQ2 reiterated its 2027 outlook for subscription revenue growth of 12.5% to 13% and adjusted EBITDA margin expansion of 150 to 200 basis points. Management expects to finish 2026 at approximately a Rule of 43, above the Rule of 40, and expects its 2027 outlook to meet or exceed that level.
- AI Product Development and Early-Adopter MomentumAt its third annual Dev Days, Q2 previewed expanded capabilities for Q2 Code and Q2 Assistant, including software-development lifecycle support and multistep customer-service and back-office workflows. The company continued signing customers into early-adopter programs for Q2 Code, Q2 Assistant, and User Activity Monitoring, and remained on pace to make the offerings generally available over the next 90 days. User Activity Monitoring reached nearly 20 financial institutions in its early-adopter program, roughly twice the company's expectation.
- AI Commercial Model Showing Early Margin PotentialManagement said early-adopter economics for new AI solutions looked positive, using a hybrid model with a base subscription fee and variable value-based components. The company is using token caps and other protections to prevent usage from putting the business upside down, and said pricing has not been a major hurdle so far.
- Fraud Intelligence Platform InvestmentQ2 said it is investing heavily in a fraud intelligence platform that combines its data, signals, digital-session visibility, and products such as User Activity Monitoring. Management characterized fraud as a significant customer pain point and said Q2's digital banking position gives it customer relationships and data that can support this opportunity.
- Relationship Pricing MomentumRelationship pricing demand is being supported by the complexity of the current rate environment. Q2 said it sits on approximately $2 trillion of loans and approximately $2 trillion of deposits, allowing it to use data to help banks make more informed pricing decisions across loans, deposits, and treasury services. Nine of the 15 largest banks in North America use the relationship pricing tool.
- Strong Renewal EconomicsManagement said third-quarter renewals were the strongest of the year across price increases, cross-sell, annual increases or inflation-indexed pricing, and contract duration. These renewal dimensions were also stronger than the already strong renewal quarters in the second half of 2025. Customers are increasingly engaging with Q2 on digital banking, fraud, and AI transformation plans.
- Innovation Studio GrowthInnovation Studio had a phenomenal year through nine months across bookings, revenue, and adoption, with more than 200 partner products. Management said AI is increasingly being incorporated into both new and existing partner products, creating a positive halo effect as Q2 distributes the technology and participates in the associated economics.
- Strong Pipeline Across Customer SegmentsManagement said the pipeline remains strong through the remainder of 2026 and into 2027, with opportunities across retail and commercial digital banking, banks and credit unions, fraud, and relationship pricing. The company also expects continued growth from existing customer expansion and customers growing organically and through mergers and acquisitions.
MX:QTWO Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 17, 2027 | 2026 (Q4) | 13.79- | 13.02 | ― | ― |
| Oct 28, 2026 | 2026 (Q3) | 13.4413.91 | 12.31 | 12.98% (+1.60) | |
| Jul 29, 2026 | 2026 (Q2) | 12.8313.15 | 9.43 | 39.44% (+3.72) | |
| Apr 29, 2026 | 2026 (Q1) | 13.2911.84 | 10.17 | 16.45% (+1.67) | |
| Feb 11, 2026 | 2025 (Q4) | 11.3713.02 | 9.06 | 43.78% (+3.97) | |
| Nov 05, 2025 | 2025 (Q3) | 10.4312.31 | 4.92 | 150.00% (+7.39) | |
| Jul 30, 2025 | 2025 (Q2) | 9.949.43 | 7.16 | 31.76% (+2.27) | |
| May 07, 2025 | 2025 (Q1) | 8.7910.17 | 5.88 | 72.84% (+4.28) | |
| Feb 12, 2025 | 2024 (Q4) | 8.959.06 | 5.07 | 78.52% (+3.98) | |
| Nov 06, 2024 | 2024 (Q3) | 6.714.92 | 3.97 | 24.17% (+0.96) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed
