Q2 Holdings, Inc.

Second quarter revenue was $219.8 million, up 13% year over year and 2% sequentially. Non-GAAP gross margin was 62.3%, versus 57.5% in the prior-year quarter, and adjusted EBITDA was a record $62.8 million, up 37% year over year, with margin of 28.6% versus 23.5% a year ago. Subscription revenue grew 15% year over year and total ARR reached $971 million, up from $861 million a year ago; subscription ARR was $826 million, up from $716 million. Backlog was $2.8 billion, up 17% year over year. For Q3 2026, management guided to revenue of $218.5 million to $222.5 million and adjusted EBITDA of $58.5 million to $61.5 million. For full-year 2026, revenue guidance was raised to $881 million to $886 million and adjusted EBITDA to $244 million to $248 million, implying about 11% revenue growth and about 28% EBITDA margin. Full-year subscription revenue growth guidance was raised to approximately 14.5% from 14%.

Matt Flake emphasized that Q2 is seeing strong demand for mission-critical banking software, with the platform becoming more relevant as customers modernize, protect against fraud, and adopt practical AI. He pointed to 8 Tier 1 and enterprise wins, including a top-25 U.S. bank expanding into relationship pricing after previously buying digital banking and fraud products, as evidence of the company’s land-and-expand model. His tone was upbeat and confident, but he repeatedly stressed that the AI products are still early and that the company is focused on getting them right before scaling them broadly.

Jonathan Price highlighted that results were above the high end of guidance on both revenue and adjusted EBITDA, with record gross margin and EBITDA. He attributed the margin improvement to the completed cloud migration and the shift toward higher-margin subscription revenue, while noting ongoing pressure in discretionary professional services. He also detailed capital allocation: cash and investments ended at $106 million after repaying $304 million of convertible notes and spending $23 million on buybacks, the company is now debt-free, free cash flow was $51 million, and the board authorized an additional $350 million of repurchases on top of the roughly $25 million remaining under the prior plan. He said the company remains focused on reinvesting in growth while using capital opportunistically.

Analysts focused on whether AI and fraud products are changing cross-sell, win rates, implementation timelines, and the monetization path for the new products. Management said AI is already driving customer interest and should help renewals, extensions and cross-sell, but it is too early to quantify revenue, and general availability for the new AI products is expected in Q4. On fraud, management said the category is growing at a premium to the overall business and should remain an accretive growth story for years, while relationship pricing was described as a major quarter highlight and a strong fit for large enterprise banks. They also said sales coverage is currently adequate and that they are not seeing a need to add reps simply because demand is strong.