Q2 Holdings (QTWO)
NYSE:QTWO
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Q2 Holdings
(NYSE:QTWO)
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Rating:67Neutral
Price Target:
$49.00
▼(-0.83% Downside)
Action:ReiteratedDate:02/12/26
The score is driven primarily by improving fundamentals (profitability, strong operating/free cash flow, and deleveraging) and a generally positive earnings outlook with margin expansion targets. These strengths are tempered by weak technical momentum (price below key moving averages with negative MACD) and a stretched valuation (very high P/E with no dividend support).
Positive Factors
Cash generation & conversion
Material, repeatable free cash flow in 2025 materially improves the firm's financial optionality. Strong cash generation funds debt reduction, strategic investments, and buybacks while lowering refinancing risk, giving the company durable flexibility to invest in product and sales over the next 2–6 months.
Negative Factors
Moderating revenue growth outlook
Management's guidance implies a meaningful slowdown versus recent peak growth, reducing the top-line runway for leverage-driven profit gains. Slower organic revenue expansion increases reliance on margin improvements and efficiency to meet profitability targets, elevating execution risk over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & conversion
Material, repeatable free cash flow in 2025 materially improves the firm's financial optionality. Strong cash generation funds debt reduction, strategic investments, and buybacks while lowering refinancing risk, giving the company durable flexibility to invest in product and sales over the next 2–6 months.
Read all positive factors
Q2 Holdings (QTWO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.08B
Dividend YieldN/A
Average Volume (3M)1.04M
Price to Earnings (P/E)86.2
Beta (1Y)1.34
Revenue Growth13.93%
EPS GrowthN/A
CountryUS
Employees2,476
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.69
Shares Outstanding62,404,373
10 Day Avg. Volume670,795
30 Day Avg. Volume1,043,012
Financial Highlights & Ratios
PEG Ratio-0.37
Price to Book (P/B)6.78
Price to Sales (P/S)5.64
P/FCF Ratio23.04
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue3.76
Enterprise Value/Gross Profit6.95
Enterprise Value/Ebitda30.38
Forecast
1Y Price Target
$76.64Price Target Upside55.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)2.92
Revenue Forecast (FY)$876.59M
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 fina...
How the Company Makes Money
Q2 primarily makes money by selling access to its software platform and related services to financial institutions under recurring, contract-based arrangements. A significant portion of revenue is generated from subscriptions and ongoing platform ...
Q2 Holdings Key Performance Indicators (KPIs)
Q2 Holdings Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call was broadly positive: the company delivered strong 2025 results with double-digit revenue and subscription growth, meaningful adjusted EBITDA and margin expansion, robust free cash flow and conversion, large-bookings momentum (including significant Tier 1 wins), and a clear long-term profitability framework. Key challenges include higher revenue churn driven by M&A activity, a weaker and shrinking non-subscription revenue base that is margin-dilutive, some sequential cost pressure from R&D and migration expenses, a cash balance decline tied to debt retirement and buybacks, and guidance that signals a moderate deceleration in growth beyond 2025. On balance, financial and operational execution and a strong pipeline outweigh the near-term headwinds.Positive Updates
Strong Subscription Revenue Growth
Q4 subscription revenue grew 16% year-over-year; full year subscription revenue grew 17% and represented 82% of total revenue, supporting higher-margin mix and recurring revenue stability.
Negative Updates
Increase in Revenue Churn
Revenue churn increased to 5.2% in 2025 from 4.4% in 2024, driven in part by elevated M&A activity, which can create near-term churn volatility despite being largely net-positive over time.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Subscription Revenue Growth
Q4 subscription revenue grew 16% year-over-year; full year subscription revenue grew 17% and represented 82% of total revenue, supporting higher-margin mix and recurring revenue stability.
Read all positive updates
Company Guidance
Management guided Q1 2026 revenue of $212.5–216.5M and full‑year 2026 revenue of $871–878M (≈10% y/y), raised full‑year subscription revenue growth to at least 14% (vs. prior ~13.5%), and expects Q1 adjusted EBITDA of $52.5–55.5M and full‑year adjusted EBITDA of $225–230M (≈26% of revenue); they also target gross margins north of 60% in 2026 (versus ~58% in FY25) and noted cloud migration completion to drive further cost savings. Management provided initial 2027 targets of subscription growth of 12.5–13% and adjusted‑EBITDA margin expansion of 150–200 bps, and a longer‑term goal of ≥65% non‑GAAP gross margin and ≥35% adjusted‑EBITDA margin by 2030. They cited supporting operating metrics—ending backlog $2.7B (+21% y/y), total ARR $921M (+12% y/y), subscription ARR $780M (+14% y/y), FY25 adjusted EBITDA $186.5M (+49% y/y), and FY25 free cash flow $173M with 93% conversion—as the basis for the outlook.Q2 Holdings Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
69
Positive
Cash Flow
83
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 794.81M | 696.46M | 624.62M | 565.67M | 498.72M |
| Gross Profit | 429.59M | 354.48M | 302.65M | 256.35M | 225.03M |
| EBITDA | 115.06M | 42.89M | 29.02M | -37.74M | -23.20M |
| Net Income | 52.01M | -38.54M | -65.38M | -108.98M | -112.75M |
Balance Sheet | |||||
| Total Assets | 1.28B | 1.29B | 1.20B | 1.35B | 1.39B |
| Cash, Cash Equivalents and Short-Term Investments | 367.63M | 446.63M | 324.01M | 433.35M | 427.73M |
| Total Debt | 346.12M | 542.99M | 548.92M | 733.34M | 621.97M |
| Total Liabilities | 614.47M | 777.00M | 752.95M | 930.70M | 814.75M |
| Stockholders Equity | 661.81M | 517.80M | 448.48M | 419.02M | 570.30M |
Cash Flow | |||||
| Free Cash Flow | 194.65M | 129.06M | 39.65M | 6.50M | 5.47M |
| Operating Cash Flow | 201.46M | 135.75M | 70.29M | 36.56M | 31.09M |
| Investing Cash Flow | -4.03M | -21.08M | 113.27M | -165.56M | -65.13M |
| Financing Cash Flow | -188.97M | 13.32M | -152.01M | 5.88M | -51.16M |
Q2 Holdings Technical Analysis
Neutral
49.41
Price Trends
52.07
Negative
61.83
Negative
69.67
Negative
Market Momentum
-1.22
Negative
50.24
Neutral
79.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QTWO, the sentiment is Neutral. The current price of 49.41 is above the 20-day moving average (MA) of 48.21, below the 50-day MA of 52.07, and below the 200-day MA of 69.67, indicating a neutral trend. The MACD of -1.22 indicates Negative momentum. The RSI at 50.24 is Neutral, neither overbought nor oversold. The STOCH value of 79.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for QTWO.
Q2 Holdings Risk Analysis
Q2 Holdings disclosed 55 risk factors in its most recent earnings report. Q2 Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Q2 Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $7.12B | -168.64 | -2.19% | ― | 50.91% | 54812.50% | |
69 Neutral | $3.84B | -143.66 | -4.43% | ― | 35.87% | 85.20% | |
68 Neutral | $2.06B | 465.26 | 0.49% | ― | 12.14% | -19.29% | |
67 Neutral | $3.08B | 86.24 | 8.62% | ― | 13.93% | ― | |
63 Neutral | $3.79B | ― | -0.63% | ― | 11.63% | 50.72% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $3.34B | ― | 56.70% | ― | 19.86% | 8.58% |
* Technology Sector Average
QTWO
Q2 Holdings
49.41
-27.22
-35.52%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.