| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 30 | 43.2x | 17.8x | Bottom tier | |
Growth | 87 | 13.9% | 7.1% | Top tier | |
Quality | 86 | 8.8% | 4.5% | Top tier | |
Safety | 89 | — | 2.6x | Top tier | |
Capital Return | 92 | — | 2.12% | Top tier | |
Momentum | 53 | -18.9% | 2.9% | Around median | |
Sentiment | 44 | 7 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Q2 Holdings provides a technology platform for financial institutions that combines digital banking for retail and commercial customers, relationship pricing, fraud risk management, and personalization and integration tools through Q2 Innovation Studio. The revenue model relies primarily on subscriptions tied to platform operation and product expansion among existing customers; in Q2 fiscal 2026, subscription revenue grew 15% year over year and represented 83% of total revenue, while non-subscription revenue remained nearly flat as transaction revenue growth offset pressure on discretionary professional services.
In Q2 fiscal 2026, revenue reached $219.8 million, up 13% year over year and 2% from the previous quarter. Gross profit according to EDGAR filings was approximately $130.2 million, equivalent to a gross margin of about 59.2%, while net income was $29.9 million and earnings per share were $0.46; net profit margin was approximately 13.6%. On a non-GAAP basis, the company recorded a record gross margin of 62.3%, adjusted EBITDA of $62.8 million, and a margin of 28.6%.
Total annual recurring revenue reached $971 million in Q2 fiscal 2026, up 13%, while subscription annual recurring revenue rose 15% to $826 million. Contracted backlog reached $2.8 billion, up 17% year over year, supported by new contracts, expansions, and renewals. Q2 Holdings ended the quarter debt-free after repaying $304 million of convertible notes, with operating cash flow of $61 million and free cash flow of $51 million.
Automated analysis for informational purposes only — not investment advice.
Analyst consensus rates QTWO a “Buy,” with an average price target of $70 and a target range of $63 to $75; the average target is below the 52-week range high of $85.19, while the range low is $40.79. The available data do not provide a valid comparable earnings multiple, so the stock's valuation here is based on the target range and the breadth of the 52-week range, balancing subscription growth and improving margins against expected growth deceleration and uncertainty surrounding the economics of the artificial intelligence products.
Figures in the text are as of 2026-08-31; the live price is shown at the top of the page.
Growth came from new customer subscriptions and expansions among existing customers, as subscription revenue rose 15% in Q2 fiscal 2026 and represented 83% of revenue. The company recorded eight wins across the Tier 1 and enterprise categories, with activity in digital banking, relationship pricing, and fraud. Management raised its fiscal 2026 subscription revenue growth forecast from 14% to approximately 14.5%, supported by bookings and first-half performance.
Q2 Assistant embeds artificial intelligence within the digital banking experience, enabling bankers to access information and navigate workflows using natural language. Q2 Code uses natural language and the Q2 development kit to accelerate the creation of custom pages, integrations, and functionality through Q2 Innovation Studio. On the July 29, 2026 call, management said a single-digit number of customers had entered early adoption for each product and that general availability was targeted for Q4 fiscal 2026, but it had not yet determined their financial contribution.
The Q2 platform operates within the flow of digital banking interactions, giving it behavioral signals related to logins, payments, and user interactions. The account takeover prevention product uses artificial intelligence to continuously monitor these signals and intervene in real time when signs of compromise are detected. As of July 29, 2026, a double-digit number of customers had subscribed to the product during early adoption, and management stated that the fraud portfolio was growing faster than the company overall.
Revenue reached $219.8 million, gross profit according to EDGAR was approximately $130.2 million, and net income was $29.9 million. On a non-GAAP basis, gross margin rose 480 basis points year over year to 62.3% following the completion of the cloud transition and an improved subscription mix. Adjusted EBITDA also rose 37% to $62.8 million, with a margin of 28.6%.
Discretionary professional services remain under pressure, which kept non-subscription revenue nearly flat in Q2 fiscal 2026. The company expects total annual growth of approximately 11% in fiscal 2026, below Q2 growth of 13%, and expects subscription revenue growth to decelerate to 12.5%–13% in fiscal 2027. The company has also not yet determined the margins of its artificial intelligence products or the timing of their revenue contribution, while digital banking implementations typically continue for between six and twelve months.
The company ended Q2 fiscal 2026 with $106 million in cash and investments after repaying $304 million of convertible notes and repurchasing $23 million of shares during the quarter. It generated $61 million in operating cash flow and $51 million in free cash flow and ended the period debt-free. After using approximately $125 million of the previous authorization, the board approved an additional $350 million repurchase authorization, increasing available capacity to approximately $375 million.
