Q2 Holdings posts $225.8 million in Q3 revenue, raises 2026 outlook
Key Facts
Q2 Holdings posted revenue of $225.8 million in the third quarter of 2026, up 12% from the same period last year, and raised its full-year revenue outlook. Reuters, via Investing.com, said revenue topped the average estimate of $221.5 million, while The Associated Press reported that the average estimate of 7 analysts surveyed by Zacks was $221.5 million. Adjusted earnings were 74 cents a share, above the average estimate of 71 cents from 6 analysts, according to The Associated Press. The results put revenue and profitability growth at the center of the company’s annual outlook update. The company also issued fourth-quarter guidance pointing to continued revenue growth, albeit at a slower pace than the expected full-year rate.
GAAP net income rose to $33.2 million in the third quarter, compared with $15.0 million in the same quarter of 2025, Reuters reported via Investing.com. GAAP gross margin increased to 59.7% from 54.0% a year earlier. On an adjusted basis, earnings before interest, taxes, depreciation and amortization were $67.8 million, compared with $48.8 million in the third quarter last year. Adjusted EBITDA margin was 30% during the quarter. The comparisons point to improved profitability alongside revenue growth, as the company raised its annual adjusted earnings range.
Q2 Holdings raised its 2026 revenue outlook to $888–892 million, equivalent to annual growth of 12%, according to Reuters via Investing.com. It also raised its forecast for adjusted earnings before interest, taxes, depreciation and amortization to a range of $253–256 million. For the fourth quarter, the company forecast revenue of $226 million to $230 million, with annual growth of 9% to 10%. The expected full-year growth rate is therefore higher than the range the company set for the final quarter. The outlook offers a view of the revenue and profitability trajectory management expects through the end of the fiscal year, following its third-quarter results.
New contracts and subscription revenue supported the company’s performance during the quarter, according to figures reported by Reuters via Investing.com. Q2 Holdings signed 7 contracts with large institutions and tier-one clients in the third quarter. Annual recurring subscription revenue rose to $846 million, up 13.5% year over year. These indicators provide context for quarterly revenue growth, combining contracts signed during the quarter with a recurring subscription base larger than a year earlier. Management had attributed strong bookings to digital banking services, with credit unions also contributing, according to the company statement as relayed in corrections to the report.
The company recorded free cash flow of $55 million in the third quarter and repurchased about 0.6 million shares for $38.8 million, according to Reuters via Investing.com. The buybacks add to operating performance indicators that included growth in net income, margin and adjusted earnings. For the stock, EL7 data showed QTWO closed at $68.13 on October 27, 2026. That was before results were announced on October 28, so it represents the closing price before the announcement and does not describe the market’s reaction to it. The data available in the report did not include the stock’s movement after the results were released.