Q2 Holdings, Inc. Announces Fourth Quarter and Full-Year 2025 Financial Results

AUSTIN, Texas--( BUSINESS WIRE)-- Q2 Holdings, Inc. (NYSE: QTWO), a leading provider of digital transformation solutions for financial services, today announced results for its fourth quarter and full year ending December 31, 2025.

GAAP Results for the Fourth Quarter and Full-Year 2025

Non-GAAP Results for the Fourth Quarter and Full-Year 2025

For a reconciliation of our GAAP to non-GAAP results, please see the tables below.

“We closed out 2025 with the second strongest bookings quarter in company history, building from the third quarter momentum and reflecting strong execution across our business,” said Matt Flake, Chairman, President and CEO, Q2. “The year featured a balanced mix of net new and expansion wins, continued demand across our major product lines and was also a pivotal year for AI-driven innovation. We delivered meaningful improvements in profitability and free cash flow, which we believe positions us well for continued execution in 2026 and beyond.”

Fourth Quarter and Full-Year Highlights

Q2 Caps Off 2025 with Strong Execution and Continued Innovation

Q2 delivered one of its strongest bookings quarters in company history in the fourth quarter, supported by a balanced mix of net new and expansion wins across digital banking, relationship pricing, and fraud solutions.

Expansion represented approximately half of the Company’s Tier 1 and Enterprise activity in full-year 2025, reflecting strong engagement across the installed base and continued success up-market.

In 2025, Q2 achieved success across its growth, profitability, and cash generation, demonstrating the strength of the business as the Company looks ahead.

Alongside this execution, Q2 advanced artificial intelligence, or AI, as a core element of its long-term strategy. The Company expanded the use of AI across existing products and workflows, delivering customer value in areas such as fraud mitigation, while also embedding AI more deeply into the platform to deliver innovation faster and improve productivity across the ecosystem.

Q2 believes its platform serves as a “system of context” for financial institutions, capturing real-time digital signals across logins, transactions, alerts, messages and user decisions, that are visible at the digital engagement layer. This context helps institutions understand what’s happening and what should happen next, enabling more effective AI-driven workflows.

As customer demand for AI-enabled solutions continues to evolve, Q2 believes its cloud-native single platform, deep data context, and trusted position with financial institutions uniquely enables the Company to help customers adopt AI responsibly and at scale. These advantages reinforce Q2’s role as a hub for AI innovation in digital banking, going through Q2 - not around it.

“We delivered strong financial results to end the year, surpassing the high end of our guidance for both revenue and adjusted EBITDA,” said Jonathan Price, CFO, Q2. “As we enter the final year of our three-year framework, we have materially outperformed our initial expectations. We’re raising our full-year 2026 subscription revenue growth outlook and introducing a new financial framework that provides an initial view into 2027 as well as longer term profitability targets.”

Financial Outlook

As of February 11, 2026, Q2 Holdings is providing guidance for its first quarter of 2026 and full-year 2026, which represents Q2 Holdings’ current estimates on Q2 Holdings’ operations and financial results. The financial information below includes adjusted EBITDA, which represents forward-looking, non-GAAP financial information. GAAP net income (loss) is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net income (loss) in that it excludes items such as depreciation and amortization, stock-based compensation, transaction-related costs, interest and other (income) expense, income taxes, lease and other restructuring charges, and non-recurring legal settlements not in our ordinary course of business. Q2 Holdings is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Q2 Holdings has not provided guidance for GAAP net income (loss) or a reconciliation of the forward-looking adjusted EBITDA guidance to GAAP net income (loss). However, it is important to note that these excluded items could be material to Q2's results computed in accordance with GAAP in future periods.

Q2 Holdings is providing guidance for its first quarter of 2026 as follows:

Q2 Holdings is providing guidance for the full-year 2026 as follows:

New Financial Framework

Q2 Holdings is also providing initial expectations for 2027 and a new financial framework that reflects the anticipated operating leverage of its business model through 2030.

Conference Call Details

Date:

Wednesday, February 11, 2026

Time:

5:00 p.m. EST

Hosts:

Matt Flake, Chairman, President & CEO / Jonathan Price, CFO

Webcast Registration:

https://events.q4inc.com/attendee/209957102

All participants must register using the above link. The webcast of the conference call and financial results will be accessible from the investor relations section of the Q2 website at http://investors.Q2.com/. An archived replay of the webcast will be available on this website for a limited time after the call. Q2 has used, and intends to continue to use, its investor relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Q2 Holdings, Inc.

Q2 is a leading provider of digital transformation solutions for financial services, serving banks, credit unions, alternative finance companies, and fintechs in the U.S. and internationally. Q2 enables its financial institution and fintech customers to provide comprehensive, data-driven digital engagement solutions for consumers, small businesses and corporate clients. Headquartered in Austin, Texas, Q2 has offices worldwide and is publicly traded on the NYSE and NYSE Texas under the stock symbol QTWO. To learn more, please visit Q2.com. Follow us on LinkedIn and X to stay up to date.

Use of Non-GAAP Measures

Q2 uses the following non-GAAP financial measures: adjusted EBITDA; adjusted EBITDA margin; non-GAAP gross margin; non-GAAP gross profit; non-GAAP sales and marketing expense; non-GAAP research and development expense; non-GAAP general and administrative expense; non-GAAP operating expense; non-GAAP operating income (loss); and free cash flow. Beginning in the year ended December 31, 2024, because there was no impact of purchase accounting on revenue, Q2's non-GAAP total revenue is now equivalent to its GAAP total revenue, and have therefore not reported non-GAAP total revenue. Management believes that these non-GAAP financial measures are useful measures of operating performance because they exclude items that Q2 does not consider indicative of its core performance.

In the case of adjusted EBITDA, Q2 adjusts net income (loss) for such items as interest and other (income) expense, taxes, depreciation and amortization, stock-based compensation, transaction-related costs, lease and other restructuring charges, and non-recurring legal settlements not in our ordinary course of business. In the case of adjusted EBITDA margin, Q2 calculates adjusted EBITDA margin by dividing adjusted EBITDA by revenue. In the case of non-GAAP gross margin and non-GAAP gross profit, Q2 adjusts gross profit and gross margin for stock-based compensation, amortization of acquired technology, transaction-related costs and lease and other restructuring charges. In the case of non-GAAP sales and marketing expense and non-GAAP research and development expense, Q2 adjusts the corresponding GAAP expense to exclude stock-based compensation. Non-GAAP general and administrative expense excludes stock-based compensation and non-recurring legal settlements not in our ordinary course of business. Non-GAAP operating expense is calculated by taking the sum of non-GAAP sales and marketing expenses, non-GAAP research and development expense and non-GAAP general and administrative expense. In the case of non-GAAP operating income (loss), Q2 adjusts operating income (loss), for stock-based compensation, transaction-related costs, amortization of acquired technology, amortization of acquired intangibles, lease and other restructuring charges and non-recurring legal settlements not in our ordinary course of business. In the case of free cash flow, Q2 adjusts net cash provided by (used in) operating activities for purchases of property and equipment and capitalized software development costs. A reconciliation of prior quarter non-GAAP financial measures to the nearest comparable GAAP measures may be found in Exhibit 99.1 of Q2's Form 8-K filed on November 5, 2025.

There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income (loss). As a result, these non-GAAP financial measures have limitations and should be considered in addition to, not as a substitute for or superior to, the closest GAAP measures, or other financial measures prepared in accordance with GAAP. A reconciliation to the closest GAAP measures of these non-GAAP measures is contained in tabular form on the attached unaudited condensed consolidated financial statements.

Q2’s management uses these non-GAAP measures as measures of operating performance; to prepare Q2’s annual operating budget; to allocate resources to enhance the financial performance of Q2’s business; to evaluate the effectiveness of Q2’s business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of Q2’s results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communication with our board of directors concerning Q2’s financial performance.

Forward-looking Statements

This press release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact, including statements about: our expectations for future financial performance; the anticipated benefits of our new financial framework and long-term operating leverage; demand for and adoption of our solutions, including digital banking, commercial, fraud and AI solutions; expected bookings activity, renewals and expansion opportunities; pipeline strength and customer demand; our ability to retain existing customers and attract new customers; our growth strategy and ability to execute on profitable growth; the scalability, differentiation and competitive advantages of our platform, data strategy and AI strategy; our AI capabilities and innovation initiatives; our ability to embed AI responsibly across our products; our ability to innovate, expand our product offerings and deliver value to customers; market opportunities, industry trends and customer demand; our capital allocation priorities, including share repurchases; our ability to navigate economic conditions and deliver long-term shareholder value; and our quarterly and annual financial guidance.

The forward-looking statements contained in this press release are based upon Q2’s historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include risks related to: (a) the risks associated with cyberattacks, financial transaction fraud, data and privacy breaches and breaches of security measures within our products, systems and infrastructure or the products, systems and infrastructure of third parties upon which we rely and the resultant disruption, costs and liabilities and harm to our business and reputation and our ability to sell our solutions; (b) the impact of and our ability to respond to global economic uncertainties and challenges or changes in the financial services industry and credit markets, including as a result of mergers and acquisitions within the banking sector, inflationary pressures, fluctuating interest rates, instability in the financial services industry, any changes to, or new, financial regulations and their potential impacts on our prospects' and customers' operations, increased acceptance and use of emerging financial products, such as cryptocurrencies or stablecoin, including any impact on the timing of prospect and customer implementations and purchasing decisions, our business sales cycles and on account holder or end user, or End User, usage of our solutions; (c) the risks associated with continued market volatility, including in the financial services sector, potential inflationary pressures and the impact of any monetary policy changes that may be implemented as a result, the possibility and potential impact of any U.S. tariffs and trade measure, including retaliatory tariffs and the impact on the valuation of marketable securities; (d) the risk of increased or new competition in our existing markets and as we enter new markets or new segments of existing markets, or as we offer new solutions; (e) the risks associated with the development of our solutions, including AI based solutions, our AI and data strategies and solutions, and changes to regulation or the market for our solutions compared to our expectations; (f) quarterly fluctuations in our operating results relative to our expectations and guidance and the accuracy of our forecasts; (g) the risks and increased costs associated with managing growth and global operations, including hiring, training, retaining and motivating employees to support such growth; (h) the risks associated with our transactional business which are typically driven by End-User behavior and can be influenced by external drivers outside of our control; (i) the risks associated with effectively managing our business and cost structure in an uncertain economic environment, including as a result of challenges in the financial services industry and the effects of seasonality and unexpected trends; (j) the risks associated with geopolitical instability, including acts of war or military conflict, uncertainties or discord, including the continuing war in Ukraine and conflicts in the Middle East and other parts of the world, heightened risk of state-sponsored cyberattacks or cyber fraud on financial services and other critical infrastructure; (k) the risks associated with accurately forecasting and managing the impacts of any economic downturn or challenges in the financial services industry on our customers and their End Users, including in particular the impacts of any downturn on financial technology companies or alternative finance companies and our arrangements with them, which may include more complex revenue arrangements for us and which may be more vulnerable to an economic downturn than our financial institution customers; (l) the challenges and costs associated with selling, implementing and supporting our solutions, particularly for larger customers with more complex requirements and longer implementation processes, including risks related to the timing and predictability of sales of our solutions and the impact that the timing of bookings and go-lives may have on our revenue and financial performance in a period; (m) the risk that errors, interruptions or delays in our solutions or Web hosting negatively impacts our business and sales; (n) the risks associated with the migration of the computing, storage and processing of our digital banking platform solutions from our third-party data centers to third-party public cloud service providers; (o) the difficulties and risks associated with developing and selling complex new solutions and enhancements, including those using AI with the technical and regulatory specifications and functionality required by our customers and relevant governmental authorities; (p) the risks associated with operating within and selling into a regulated industry, including risks related to evolving regulation of, and litigation with respect to, AI and machine learning, the receipt, collection, storage, processing and transfer of data and increased regulatory scrutiny on financial technology and related services, including specifically on banking-as-a-service, or BaaS, services; (q) the risks associated with our sales and marketing capabilities, including partner relationships and the length, cost and unpredictability of our sales cycle; (r) the risks inherent in third-party technology and implementation partnerships, including defects, failures, interruptions or disruptions in third-party services or solutions, that could disrupt our services or otherwise cause harm to our business; (s) the risk that we will not be able to maintain historical contract terms such as pricing and duration; (t) the general risks associated with the complexity of our customer arrangements and our solutions; (u) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (v) the risks and challenges around increased regulatory scrutiny and evolving requirements for money movement services and the resulting potential higher costs, increased complexity and limitations on offerings on our business and financial results; (w) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (x) the risks associated with further consolidation in the financial services industry; (y) the risks associated with selling our solutions internationally and with the continued expansion of our international operations; and (z) the risk that our debt repayment obligations may adversely affect our financial condition and that we may not be able to obtain capital when desired or needed on favorable terms.

Additional information relating to the uncertainty affecting the Q2 business is contained in Q2’s filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Q2’s website at http://investors.Q2.com/. These forward-looking statements represent Q2’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Q2 disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

Q2 Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

December 31, 2025

December 31, 2024

Assets

Current assets:

Cash and cash equivalents

367,631

358,560

Restricted cash

1,672

2,233

Investments

65,064

88,066

Accounts receivable, net

51,716

42,084

Contract assets, current portion, net

8,596

7,888

Prepaid expenses and other current assets

28,234

23,512

Deferred solution and other costs, current portion

22,631

26,611

Deferred implementation costs, current portion

10,508

9,706

Total current assets

556,052

558,660

Property and equipment, net

27,783

31,528

Right of use assets

27,188

30,402

Deferred solution and other costs, net of current portion

27,827

28,116

Deferred implementation costs, net of current portion

28,929

26,408

Intangible assets, net

78,377

94,633

Goodwill

512,869

Contract assets, net of current portion and allowance

14,103

9,483

Other long-term assets

3,149

2,696

Total assets

1,276,277

1,294,795

Liabilities and stockholders' equity

Current liabilities:

Accounts payable and accrued liabilities

76,799

60,542

Convertible notes, current portion

303,368

190,331

Deferred revenues, current portion

155,003

137,700

Lease liabilities, current portion

8,915

10,327

Total current liabilities

544,085

398,900

Convertible notes, net of current portion

—

302,115

Deferred revenues, net of current portion

26,826

27,281

Lease liabilities, net of current portion

33,832

38,346

Other long-term liabilities

9,723

10,357

Total liabilities

614,466

776,999

Stockholders' equity:

Common stock

Additional paid-in capital

1,275,980

1,183,893

Accumulated other comprehensive loss

(1,953

)

(1,873

)

Accumulated deficit

(612,222

)

(664,230

)

Total stockholders' equity

661,811

517,796

Total liabilities and stockholders' equity

1,276,277

1,294,795

Q2 Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per share data)

(unaudited)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Revenues (1)

208,222

183,045

794,809

696,464

Cost of revenues (2)

92,938

86,702

365,126

341,983

Gross profit

115,284

96,343

429,683

354,481

Operating expenses:

Sales and marketing

25,893

27,215

105,858

105,951

Research and development

40,631

35,722

154,330

143,244

General and administrative

30,452

29,988

125,513

122,942

Transaction-related costs

166

—

166

—

Amortization of acquired intangibles

—

2,587

16,979

Lease and other restructuring charges

1,278

2,406

3,826

7,628

Total operating expenses

98,420

97,918

389,786

396,744

Income (loss) from operations

16,864

(1,575

)

39,897

(42,263

)

Total other income, net

3,916

3,511

14,828

11,403

Income (loss) before income taxes

20,780

1,936

54,725

(30,860

)

Provision for income taxes

(337

)

(1,772

)

(2,717

)

(7,676

)

Net income (loss)

20,443

164

52,008

(38,536

)

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale investments

(24

)

(168

)

(36

)

392

Foreign currency translation adjustment

(73

)

(1,112

)

(44

)

(1,154

)

Comprehensive income (loss)

20,346

(1,116

)

51,928

(39,298

)

Net income (loss) per common share:

Basic

0.33

0.00

0.84

(0.64

)

Diluted

0.31

0.00

0.80

(0.64

)

Weighted average common shares outstanding

Basic

62,515

60,497

62,156

60,105

Diluted

68,394

64,654

65,118

60,105

(1)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Subscription

170,669

146,597

648,598

553,610

Transactional

17,406

17,562

70,643

68,489

Services and Other

20,147

18,886

75,568

74,365

Total Revenues

208,222

183,045

794,809

696,464

(2)

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Twelve Months Ended December 31,

2025

2024

Cash flows from operating activities:

Net income (loss)

52,008

(38,536

)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Amortization of deferred implementation, solution and other costs

30,086

27,038

Depreciation and amortization

53,424

68,809

Amortization of debt issuance costs

2,111

2,059

Amortization of premiums and discounts on investments

(1,098

)

(1,273

)

Stock-based compensation expense

86,949

89,215

Deferred income taxes

1,236

2,106

Other non-cash charges

653

1,179

Changes in operating assets and liabilities

(23,908

)

(14,846

)

Net cash provided by operating activities

201,461

135,751

Cash flows from investing activities:

Net maturities of investments

24,065

7,951

Purchases of property and equipment

(6,810

)

(6,692

)

Capitalized software development costs

(21,283

)

(22,339

)

Net cash used in investing activities

(4,028

)

(21,080

)

Cash flows from financing activities:

Repurchases of common shares

(5,000

)

—

Payment for maturity of convertible notes

(191,000

)

—

Debt issuance costs related to Revolving Credit Agreement

—

(942

)

Proceeds from exercise of stock options and ESPP

7,028

14,259

Net cash provided by (used in) financing activities

(188,972

)

13,317

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(827

)

Net increase in cash, cash equivalents and restricted cash

8,510

127,161

Cash, cash equivalents and restricted cash, beginning of period

360,793

233,632

Cash, cash equivalents and restricted cash, end of period

369,303

360,793

Q2 Holdings, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share data)

(Unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2025

2024

2025

2024

GAAP gross profit

115,284

96,343

429,683

354,481

Stock-based compensation

2,108

2,246

9,711

11,821

Amortization of acquired technology

4,537

5,504

21,049

22,016

Lease and other restructuring charges

192

903

652

1,889

Non-GAAP gross profit

122,121

104,996

461,095

390,207

Revenues

208,222

183,045

794,809

696,464

GAAP gross margin

55.4

52.6

54.1

50.9

Non-GAAP gross margin

58.6

57.4

58.0

56.0

GAAP sales and marketing expense

25,893

27,215

105,858

105,951

Stock-based compensation

(2,810

)

(3,996

)

(14,196

)

(16,779

)

Non-GAAP sales and marketing expense

23,083

23,219

91,662

89,172

GAAP research and development expense

40,631

35,722

154,330

143,244

Stock-based compensation

(4,308

)

(3,253

)

(16,860

)

(16,456

)

Non-GAAP research and development expense

36,323

32,469

137,470

126,788

GAAP general and administrative expense

30,452

29,988

125,513

122,942

Stock-based compensation

(10,956

)

(10,264

)

(46,182

)

(44,159

)

Non-recurring legal settlements

—

(1,750

)

—

Non-GAAP general and administrative expense

19,496

19,724

77,581

78,783

GAAP operating income (loss)

16,864

(1,575

)

39,897

(42,263

)

Stock-based compensation

20,182

19,759

86,949

89,215

Transaction-related costs

166

—

166

—

Amortization of acquired technology

4,537

5,504

21,049

22,016

Amortization of acquired intangibles

—

2,587

16,979

Lease and other restructuring charges

1,470

3,309

4,478

9,517

Non-recurring legal settlements

—

1,750

—

Non-GAAP operating income

43,219

29,584

154,382

95,464

Reconciliation of GAAP net income (loss) to adjusted EBITDA:

GAAP net income (loss)

20,443

164

52,008

(38,536

)

Stock-based compensation

20,182

19,759

86,949

89,215

Transaction-related costs

166

—

166

—

Depreciation and amortization

12,536

15,990

53,424

68,809

Lease and other restructuring charges

1,470

3,309

4,478

9,517

Non-recurring legal settlements

—

1,750

—

Provision for income taxes

337

1,772

2,717

7,676

Interest and other income, net

(3,946

)

(3,370

)

(14,978

)

(11,343

)

Adjusted EBITDA

51,188

37,624

186,514

125,338

Adjusted EBITDA margin

24.6

20.6

23.5

18.0

Q2 Holdings, Inc.

Reconciliation of Free Cash Flow

(in thousands)

(unaudited)

Twelve Months Ended December 31,

2025

2024

Net cash provided by operating activities

201,461

135,751

Purchases of property and equipment

(6,810

)

(6,692

)

Capitalized software development costs

(21,283

)

(22,339

)

Free cash flow

173,368

106,720