Q2 Holdings (QTWO) AI Stock Analysis

• Market Cap: $5.89B
• Dividend Yield: N/A
• Average Volume (3M): 479.76K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.67
• Revenue Growth: 13.12%
• EPS Growth: 75.24%
• Country: US
• Employees: 2,476
• Sector: Technology
• Sector Strength: 87
• Industry: Software - Application
• EPS (TTM): 0.54
• Shares Outstanding: 62,303,844
• 10 Day Avg. Volume: 690,702
• 30 Day Avg. Volume: 479,758
• PEG Ratio: 2.83
• Price to Book (P/B): 3.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 236.72
• Enterprise Value/Market Cap: 0.35
• Enterprise Value/Revenue: 0.75
• Enterprise Value/Gross Profit: 5.62
• Enterprise Value/Ebitda: 15.90
• 1Y Price Target: $100.17
• Price Target Upside: 5.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 62 Neutral
• Price Target: $95.00 ▲(0.43%Upside)

Q2 Holdings shows strong revenue growth and positive technical momentum, bolstered by positive shareholder engagement. However, profitability challenges and a high P/E ratio weigh down the score, suggesting cautious optimism.

Positive Factors

Customer Retention

QTWO signed 5 Tier-1 and Enterprise contracts and renewed 3 of its top 10 customers in the quarter, an encouraging sign that QTWO remains a leading provider and continues to gain share in the digital banking space.

Market Opportunity

QTWO offers a premier platform solution in a $10 billion market with substantial addressable opportunity to displace legacy competition.

Revenue Growth

Management has very strong visibility and confidence in being able to deliver at least +13% subscription revenue growth in '26.

Negative Factors

Elevated Costs

Elevated deposit costs, a still-large renewal opportunity, and continued Tier 2/3 traction leave analysts comfortable with a +14% y/y subs rev growth estimate in '26.

Q2 Holdings Business Overview & Revenue Model

Company Description

Q2 Holdings, Inc. provides cloud-based digital banking solutions to regional and community financial institutions (RCFIs) in the United States. The company offers Q2 Consumer Banking, a browser-based digital banking solution and comprehensive financial institution branded digital banking capabilities; Q2 Small Business and Commercial, a mobile and tablet digital banking solution; Q2mobile Remote Deposit Capture, a partnered solution that allows remote check deposit capture. It also provides Q2 Sentinel, a security analytics solution; Q2 Patrol, an event-driven validation product; Q2 SMART, a targeting and messaging platform; and Q2 CardSwap that allows account holders receiving newly issued cards to automatically change their payment information. In addition, the company offers Q2 Gro, a digital account opening, and digital sales and marketing platform; Q2 Biller Direct, a bill payment solution; ClickSWITCH allows financial institutions to direct deposits to the end user. Centrix Dispute Tracking System, an electronic transaction dispute management solution; Centrix Payments I.Q. System, an ACH file monitoring and risk reporting solution; Centrix Exact/Transaction Management System, a fraud prevention tool; and Q2 Caliper Software Development Kit. Futher, it provides Q2 Contextual PFM, which allows end users to add external accounts and view them together with internal accounts on digital banking home page; Q2 Goals that enables end users to establish and save towards specific savings goals; Q2 Cloud Lending, a digital lending and leasing platform; PrecisionLender platform, a cloud-based, data-driven sales enablement, pricing, and portfolio management solution; and Q2 BaaS, a portfolio of open API financial services. The company was formerly known as CBG Holdings, Inc. and changed its name to Q2 Holdings, Inc. in March 2013. Q2 Holdings, Inc. was founded in 2004 and is headquartered in Austin, Texas.

How the Company Makes Money

Q2 Holdings generates revenue primarily through subscription fees and usage-based fees for its digital banking solutions. The company operates using a Software-as-a-Service (SaaS) model, where financial institutions pay recurring fees to access Q2’s platform and services. Additionally, Q2 earns money from professional services fees, which include implementation, training, and consulting services to help customers integrate and optimize the use of their digital platforms. Key partnerships with technology providers and financial institutions further enhance Q2’s product offerings and contribute to its revenue growth by expanding its market reach and customer base.

Q2 Holdings Financial Statement Overview

Summary

Q2 Holdings exhibits strong revenue growth and improving cash flow metrics, indicative of future potential. However, ongoing profitability challenges and reliance on external financing pose risks.

Income Statement

Q2 Holdings has shown consistent revenue growth over the years with a TTM (Trailing-Twelve-Months) revenue of $720.7M, up from $402.8M in 2020, indicating a strong expansion trajectory. However, the company faces challenges in profitability, with negative net income and EBIT margins in the TTM period, although EBITDA margins have improved. The gross profit margin remains healthy at 51.1%, suggesting effective cost management at the gross level.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio, with total debt at $539.0M and stockholders' equity at $545.5M in the TTM period. The equity ratio is 40.4%, indicating a balanced capital structure. The return on equity remains negative due to ongoing net losses, which is a concern for investors looking for profitability.

Cash Flow

Q2 Holdings has demonstrated significant improvement in operating cash flow, with TTM operating cash flow of $165.8M, indicating enhanced operational efficiency. Free cash flow to net income ratio is robust, supported by positive free cash flow growth. However, the reliance on external financing in the past could pose risks if cash flows do not sustain their growth trajectory.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	720.69M	696.46M	624.62M	565.67M	498.72M	402.75M
Gross Profit	368.43M	354.48M	302.65M	256.35M	225.03M	174.60M
EBITDA	51.01M	42.89M	29.02M	-37.74M	-23.20M	-55.72M
Net Income	-19.94M	-38.54M	-65.38M	-108.98M	-112.75M	-137.62M
Balance Sheet
Total Assets	1.35B	1.29B	1.20B	1.35B	1.39B	1.42B
Cash, Cash Equivalents and Short-Term Investments	486.05M	446.63M	324.01M	433.35M	427.73M	539.05M
Total Debt	539.05M	541.12M	546.49M	731.09M	621.97M	601.05M
Total Liabilities	804.40M	777.00M	752.95M	930.70M	814.75M	773.34M
Stockholders Equity	545.46M	517.80M	448.48M	419.02M	570.30M	643.36M
Cash Flow
Free Cash Flow	156.12M	129.06M	39.65M	6.50M	5.31M	-27.56M
Operating Cash Flow	165.85M	135.75M	70.29M	36.56M	30.93M	-2.89M
Investing Cash Flow	-64.08M	-21.08M	113.27M	-165.56M	-65.13M	-124.16M
Financing Cash Flow	5.46M	13.32M	-152.01M	5.88M	-51.16M	434.68M

Q2 Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QTWO, the sentiment is Positive. The current price of 94.59 is above the 20-day moving average (MA) of 90.99, above the 50-day MA of 87.79, and above the 200-day MA of 88.72, indicating a bullish trend. The MACD of 1.78 indicates Negative momentum. The RSI at 60.68 is Neutral, neither overbought nor oversold. The STOCH value of 62.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QTWO.

Q2 Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALRM	77 Outperform	$2.87B	24.40	17.27%	―	6.72%	43.44%
PYCR	74 Outperform	$4.09B	―	-1.66%	―	15.72%	74.59%
Sector *	63 Neutral	$34.07B	6.13	-11.73%	1.80%	5.33%	-18.31%
INTA	63 Neutral	$3.89B	―	-4.16%	―	17.70%	61.98%
BILL	62 Neutral	$4.97B	482.28	0.97%	―	14.52%	―
QTWO	62 Neutral	$5.89B	―	-3.95%	―	13.12%	75.24%
NCNO	56 Neutral	$3.33B	―	-2.75%	―	13.39%	16.12%

Q2 Holdings Corporate Events

Q2 Holdings Concludes Annual Stockholders’ Meeting Successfully

On June 3, 2025, Q2 Holdings held its annual stockholders’ meeting where 94.35% of eligible shares were represented. During the meeting, all director nominees were elected, Ernst & Young LLP was ratified as the independent registered public accounting firm for 2025, and the compensation for the company’s named executive officers was approved on an advisory basis.

The most recent analyst rating on (QTWO) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on Q2 Holdings stock, see the QTWO Stock Forecast page.