What is the market's earnings forecast for Q2 Holdings next quarter?

Did Q2 Holdings beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Q2 Holdings year over year?

What guidance did Q2 Holdings's management provide for the next earnings period?

What does Q2 Holdings do and what are its main business segments?

What were the key takeaways from Q2 Holdings's earnings call?

What were the key takeaways from Q2 Holdings’s earnings call?

What factors drove the changes in Q2 Holdings's revenue and profit?

- **Revenue & Profit Growth**: Q3 revenue $202M (+15% YoY), EBITDA $49M (+50% YoY), with 2025 full-year guidance raised to $789-793M.
- **AI-Driven Innovation**: Showcased AI solutions for fraud, customer service, and developer tools, positioning Q2 as a trusted AI partner for banks.
- **Subscription Momentum**: Subscription ARR $745M (+14% YoY), with 13.5% 2026 growth target and 60%+ gross margin outlook.
- **Leadership Reorg**: COO and CBO roles created to accelerate AI adoption and product innovation, aligning teams for 2026+ growth.
- **Free Cash Flow**: Q3 free cash flow $37M, with 2026 conversion >90%, supporting buyback program and strategic investments.

**【CEO Summary Section】**
- **Record Q3 Financials**: Revenue of $202 million (+15% YoY), adjusted EBITDA of $49 million (24.2% margin), and free cash flow of $37 million.
- **Strong Bookings**: 7 Tier 1 and enterprise wins, including net new customers, driving the best third-quarter bookings in company history.
- **AI Innovation**: Showcased AI Copilot, AI-assisted coding, and a unified data ecosystem at Dev Days, positioning Q2 as a partner for banks adopting AI responsibly.
- **Leadership Changes**: Hima Mukkamala appointed COO, Kirk Coleman as CBO, aligning teams for AI-driven growth and product innovation.

**【CFO Financial Commentary】**
- **Revenue Growth**: Subscription revenue at 82% of total, up 18% YoY, with ARR reaching $888 million (+12% YoY).
- **Profitability**: Gross margin 57.9% (up 1.9ppts YoY), adjusted EBITDA of $48.8 million (+50% YoY), and free cash flow conversion >90%.
- **Guidance Update**: Full-year 2025 revenue $789-793 million (+13-14% YoY), EBITDA $182.5-185.5 million. 2026 outlook: 13.5% sub revenue growth, 60%+ gross margin, 250bps EBITDA margin expansion.
- **Capital Allocation**: $150M share buyback authorized, prioritizing debt repayment and strategic investments.

**【Q&A Highlights】**
- **AI Adoption**: Banks prioritize AI for fraud detection and customer experience, with Q2 leveraging its data scale and compliance expertise.
- **M&A Impact**: 2025 M&A activity supports services revenue, with Q2 winning post-merger tech stacks for combined banks.
- **Cross-Sell Opportunities**: 90% of Tier 1 customers use 1-2 products, with 10% using all three (retail, commercial, relationship pricing), driving long-term sub revenue growth.
- **Gross Margin Levers**: Cloud migration completion in early 2026 will reduce costs and improve elasticity in cloud operations.
- **Pricing Discipline**: No material change in pricing strategy; Q2 focuses on value-based selling to maintain margins.

Q2 Holdings, Inc. (QTWO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

QTWO

QTWO fundamentals

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