QTWO · Q2 Holdings, Inc.

Q2 Holdings delivered robust Q1 2026 results, with revenue of $216.5 million reflecting 14% year-over-year growth driven by record bookings, including nine Enterprise and Tier 1 contracts, highlighted by a significant expansion with the Synovus-Pinnacle merger for commercial digital banking and fraud solutions, and the largest fraud deal in company history. Subscription Annualized Recurring Revenue rose 14% to $802.3 million, while Remaining Performance Obligations (Backlog) expanded 19% year-over-year to $2.7 billion, signaling strong future revenue visibility. Profitability metrics showed substantial improvement: GAAP gross margin expanded 590 basis points year-over-year to 59.1%, and Non-GAAP gross margin rose to 62.1%, reflecting operational efficiencies and scaling. GAAP net income surged to $26.6 million from $4.8 million prior year, while Adjusted EBITDA grew 47% to $60.0 million, with margins at 27-28%. Management, led by CEO Matt Flake, emphasized execution on priorities, momentum in digital banking and risk/fraud solutions, and AI advancements positioning Q2 as a 'System of Context' for real-time banking actions in efficiency, fraud prevention, and personalization. CFO Jonathan Price noted progress in scaling and capital allocation. Guidance was updated conservatively for full-year revenue growth of 10-11% to $875-882 million and Adjusted EBITDA of $237-242 million at 27% margin, with Q2 revenue at $214-218 million. The company also advanced capital returns, repurchasing $97.2 million in shares, leaving $47.8 million on authorization, underscoring confidence in valuation and cash generation.