Q2 Holdings (QTWO) AI Stock Analysis

• Market Cap: $4.53B
• Dividend Yield: N/A
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 149.6
• Beta (1Y): 1.48
• Revenue Growth: 13.93%
• EPS Growth: N/A
• Country: US
• Employees: 2,476
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.66
• Shares Outstanding: 62,530,006
• 10 Day Avg. Volume: 959,368
• 30 Day Avg. Volume: 1,040,762
• PEG Ratio: 3.66
• Price to Book (P/B): 11.68
• Price to Sales (P/S): 8.69
• P/FCF Ratio: 46.87
• Enterprise Value/Market Cap: 1.44
• Enterprise Value/Revenue: 8.48
• Enterprise Value/Gross Profit: 15.88
• Enterprise Value/Ebitda: 70.45
• 1Y Price Target: $100.00
• Price Target Upside: 59.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $77.00 ▲(22.98% Upside)

Q2 Holdings' strong financial performance and positive earnings call are the primary drivers of its score, reflecting robust revenue growth and strategic expansions. However, high valuation and technical indicators suggest caution, as the stock is currently trading below key moving averages.

Positive Factors

Revenue Growth

The consistent revenue growth, surpassing guidance, indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Cash Flow Generation

Robust free cash flow generation enhances financial flexibility, enabling strategic investments and debt reduction, crucial for sustainable growth.

Subscription Revenue Growth

The shift towards subscription-based revenue provides a stable, recurring income stream, enhancing predictability and profitability over time.

Negative Factors

High Leverage

High leverage can increase financial risk, limiting flexibility in downturns and potentially impacting long-term financial health and investment capacity.

Negative EBIT Margins

Persistent negative EBIT margins highlight operational inefficiencies, which could hinder profitability and competitiveness if not addressed.

Decline in Professional Services Revenue

A decline in professional services revenue may indicate reduced demand or competitive pressures, impacting overall revenue diversification and growth potential.

Q2 Holdings Business Overview & Revenue Model

Company Description

Q2 Holdings (QTWO) is a leading provider of digital banking solutions, primarily serving financial institutions such as banks and credit unions. The company operates in the fintech sector, offering a comprehensive suite of cloud-based software applications designed to enhance the digital experience for financial institutions and their customers. Q2's core products include digital banking platforms, customer experience management tools, and integrated payment solutions, enabling institutions to deliver seamless, secure, and innovative banking services.

How the Company Makes Money

Q2 Holdings generates revenue primarily through a subscription-based model, where financial institutions pay recurring fees for access to its software and services. Key revenue streams include software licensing fees, transaction fees, and professional services related to implementation and ongoing support. Additionally, the company benefits from partnerships with various financial institutions and technology providers, allowing it to expand its market reach and enhance its product offerings. The increasing demand for digital banking solutions and the ongoing transition of financial services to online platforms contribute significantly to Q2's earnings.

Q2 Holdings Financial Statement Overview

Summary

Q2 Holdings shows strong revenue and cash flow growth, with improvements in net profit margin and return on equity. However, challenges remain in achieving consistent profitability due to negative EBIT margins and high leverage.

Income Statement

Q2 Holdings has demonstrated robust revenue growth, with a steady increase from $402.8 million in 2020 to $742.9 million in TTM (Trailing-Twelve-Months) 2025, reflecting a solid growth trajectory. The gross profit margin improved, but EBIT and EBITDA margins show challenges in achieving operational profitability, as EBIT remains negative. Net profit margin turned positive in the TTM period, indicating potential improvements in cost management.

Balance Sheet

The balance sheet shows a strengthening equity position with stockholders' equity increasing over time, supporting an improved equity ratio. However, the debt-to-equity ratio remains high, indicating reliance on debt financing. Return on equity turned positive in the TTM period, showing potential for improved shareholder value.

Cash Flow

There is strong growth in operating cash flow and free cash flow, demonstrating improved cash generation capabilities. The free cash flow to net income ratio is positive, suggesting efficient cash management. The improvement in operating cash flow to net income ratio reflects enhanced operational efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	769.63M	696.46M	624.62M	565.67M	498.72M	402.75M
Gross Profit	410.74M	354.48M	302.65M	256.35M	225.03M	174.60M
EBITDA	92.59M	42.89M	29.02M	-37.74M	-23.20M	-55.72M
Net Income	31.73M	-38.54M	-65.38M	-108.98M	-112.75M	-137.62M
Balance Sheet
Total Assets	1.43B	1.29B	1.20B	1.35B	1.39B	1.42B
Cash, Cash Equivalents and Short-Term Investments	570.87M	446.63M	324.01M	433.35M	427.73M	539.05M
Total Debt	539.08M	542.99M	548.92M	733.34M	621.97M	601.05M
Total Liabilities	803.82M	777.00M	752.95M	930.70M	814.75M	773.34M
Stockholders Equity	622.88M	517.80M	448.48M	419.02M	570.30M	643.36M
Cash Flow
Free Cash Flow	169.80M	129.06M	39.65M	6.50M	5.31M	-27.56M
Operating Cash Flow	180.80M	135.75M	70.29M	36.56M	30.93M	-2.89M
Investing Cash Flow	-34.79M	-21.08M	113.27M	-165.56M	-65.13M	-124.16M
Financing Cash Flow	7.03M	13.32M	-152.01M	5.88M	-51.16M	434.68M

Q2 Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 62.61
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 62.61 is below the 20-day moving average (MA) of 65.34, below the 50-day MA of 69.64, and below the 200-day MA of 80.48, indicating a neutral trend. The MACD of 1.57 indicates Negative momentum. The RSI at 63.83 is Neutral, neither overbought nor oversold. The STOCH value of 85.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for QTWO.

Q2 Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWAN	73 Outperform	$5.63B	12.58	32.91%	―	50.91%	54812.50%
QTWO	70 Outperform	$4.53B	149.57	5.68%	―	13.93%	―
BILL	69 Neutral	$5.04B	-184.77	0.30%	―	11.63%	50.72%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NCNO	61 Neutral	$2.96B	―	-3.15%	―	13.24%	-12.97%
ZETA	61 Neutral	$4.44B	―	-3.92%	―	35.87%	85.20%
WK	56 Neutral	$5.11B	―	―	―	19.86%	8.58%

Q2 Holdings Corporate Events

Q2 Holdings Reports Strong Q3 2025 Results

Q2 Holdings, Inc. is a prominent provider of digital transformation solutions for financial services, catering to banks, credit unions, and fintech companies globally. Headquartered in Austin, Texas, the company is publicly traded on the NYSE under the symbol QTWO.

Q2 Holdings Announces $150 Million Share Buyback

On November 5, 2025, Q2 Holdings announced a $150 million share repurchase program, which allows the company to buy back its common stock through various transactions. This move, funded by existing cash balances, is part of Q2’s strategy to leverage its strong financial position. In its third quarter of 2025, Q2 reported a 15% year-over-year revenue increase to $201.7 million and a GAAP net income of $15.0 million, reversing a loss from the previous year. The company also highlighted significant contract wins and leadership changes aimed at aligning with its long-term strategy, focusing on AI innovation and digital banking solutions. These developments are expected to strengthen Q2’s market position and drive sustained growth.

The most recent analyst rating on (QTWO) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Q2 Holdings stock, see the QTWO Stock Forecast page.

Q2 Holdings Announces Executive Leadership Changes

On October 31, 2025, Q2 Holdings, Inc. announced significant changes in its executive leadership. Himagiri Mukkamala, previously the Chief Development Officer, was appointed as the Chief Operating Officer, effective November 6, 2025, to oversee engineering, service delivery, and customer experience. Concurrently, Kirk L. Coleman, the current President, was named Chief Business Officer to lead sales, customer success, marketing, and product organizations. Matthew P. Flake was appointed as President in addition to his roles as Chairman and CEO. Michael A. Volanoski, the Chief Revenue Officer, will depart the company but will remain in his role until December 12, 2025, to ensure a smooth transition.

The most recent analyst rating on (QTWO) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Q2 Holdings stock, see the QTWO Stock Forecast page.