Q2 Holdings, Inc 10-Q for FY2026 Q1

Q2 Holdings, Inc. (QTWO)

10-Q 2026-04-29 For: 2026-03-31

Added on April 29, 2026

About this 10-Q

Q2 Holdings, Inc filed this 10-Q on April 29, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $216.51M; up 14.1% from $189.74M a year earlier
Net income: $26.64M; up 460.5% from net income of $4.75M a year earlier
Diluted EPS: $0.40; up 471.4% from $0.07 a year earlier

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		PAGE
PART I: FINANCIAL INFORMATION

Item 1.	Financial Statements .	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	40

Item 4.	Controls and Procedures.	41

PART II: OTHER INFORMATION

Item 1.	Legal Proceedings.	42

Item 1A.	Risk Factors.	42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	42

Item 3.	Defaults Upon Senior Securities.	42

Item 4.	Mine Safety Disclosures.	42

Item 5.	Other Information.	42

Item 6.	Exhibits.	43

SIGNATURES		45


	March 31, 2026		December 31, 2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	342,332	$	367,631
Restricted cash	2,057		1,672
Investments	36,559		65,064
Accounts receivable, net	74,196		51,716
Contract assets, current portion, net	7,356		8,596
Prepaid expenses and other current assets	21,963		28,234
Deferred solution and other costs, current portion	29,535		22,631
Deferred implementation costs, current portion	10,575		10,508
Total current assets	524,573		556,052
Property and equipment, net	27,933		27,783
Right of use assets	25,768		27,188
Deferred solution and other costs, net of current portion	29,961		27,827
Deferred implementation costs, net of current portion	31,235		28,929
Intangible assets, net	75,781		78,377
Goodwill	512,869		512,869
Contract assets, net of current portion and allowance	15,138		14,103
Other long-term assets	3,089		3,149
Total assets	$	1,246,347	$	1,276,277
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	10,278	$	20,473
Accrued liabilities	25,604		24,572
Accrued compensation	17,534		31,754
Convertible notes, current portion	303,682		303,368
Deferred revenues, current portion	196,762		155,003
Lease liabilities, current portion	8,628		8,915
Total current liabilities	562,488		544,085

Deferred revenues, net of current portion	30,557		26,826
Lease liabilities, net of current portion	31,592		33,832
Other long-term liabilities	10,034		9,723
Total liabilities	634,671		614,466
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock: $0.0001 par value; 5,000 shares authorized, no shares issued or outstanding as of March 31, 2026 and December 31, 2025	—		—
Common stock: $0.0001 par value; 150,000 shares authorized, 62,665 issued and outstanding as of March 31, 2026 and 62,741 shares issued and outstanding as of December 31, 2025	6		6

Additional paid-in capital	1,199,888		1,275,980
Accumulated other comprehensive loss	(2,635)		(1,953)
Accumulated deficit	(585,583)		(612,222)
Total stockholders' equity	611,676		661,811
Total liabilities and stockholders' equity	$	1,246,347	$	1,276,277


	Three Months Ended March 31,
	2026		2025
Revenues	$	216,506	$	189,735
Cost of revenues	88,592		88,745
Gross profit	127,914		100,990
Operating expenses:
Sales and marketing	25,720		26,527
Research and development	41,880		37,853
General and administrative	32,187		32,322
Transaction-related costs	250		—
Amortization of acquired intangibles	—		93

Lease and other restructuring charges	188		2,006
Total operating expenses	100,225		98,801
Income from operations	27,689		2,189
Other income (expense):
Interest and other income	3,269		4,586
Interest and other expense	(1,205)		(1,535)

Total other income, net	2,064		3,051
Income before income taxes	29,753		5,240
Provision for income taxes	(3,114)		(487)
Net income	$	26,639	$	4,753
Other comprehensive income (loss):
Unrealized loss on available-for-sale investments	(60)		(24)
Foreign currency translation adjustment	(622)		177
Comprehensive income	$	25,957	$	4,906
Net income per common share
Basic	$	0.43	$	0.08
Diluted	$	0.40	$	0.07
Weighted average common shares outstanding
Basic	62,338		61,222
Diluted	67,647		64,820


	Three Months Ended March 31,
	2026		2025
Total stockholders' equity, beginning balances	$	661,811	$	517,796

Common stock and additional paid-in capital:
Beginning balances	1,275,986		1,183,899
Stock-based compensation expense	21,061		22,209
Exercise of stock options	—		547

Repurchase of common shares	(97,153)		—









Ending balances	1,199,894		1,206,655

Accumulated deficit:
Beginning balances	(612,222)		(664,230)

Net income	26,639		4,753
Ending balances	(585,583)		(659,477)

Accumulated other comprehensive loss:
Beginning balances	(1,953)		(1,873)
Other comprehensive income (loss)	(682)		153
Ending balances	(2,635)		(1,720)

Total stockholders' equity, ending balances	$	611,676	$	545,458

Common stock (in shares):
Beginning balances	62,741		60,728

Exercise of stock options	—		12

Repurchase of common shares	(1,765)		—
Shares issued for the vesting of restricted stock awards	1,689		1,564


Ending balances	62,665		62,304


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	26,639	$	4,753
Adjustments to reconcile net income to net cash from operating activities:
Amortization of deferred implementation, solution and other costs	7,748		6,961
Depreciation and amortization	11,743		13,720
Amortization of debt issuance costs	360		543
Amortization of premiums and discounts on investments	(42)		(301)
Stock-based compensation expense	20,265		21,010
Deferred income taxes	343		(2,042)
Lease restructuring and impairments	161		434
Other non-cash items	100		31
Changes in operating assets and liabilities:
Accounts receivable, net	(22,775)		(20,505)
Prepaid expenses and other current assets	6,125		1,787
Deferred solution and other costs	(12,507)		(7,219)
Deferred implementation costs	(6,366)		(4,485)
Contract assets, net	205		(1,461)
Other long-term assets	92		1,488
Accounts payable	(7,880)		5,404
Accrued liabilities	(10,964)		(8,542)
Deferred revenues	45,492		36,093
Deferred rent and other long-term liabilities	(2,418)		(4,138)
Net cash provided by operating activities	56,321		43,531
Cash flows from investing activities:
Purchases of investments	—		(33,980)
Maturities of investments	28,487		20,175
Purchases of property and equipment	(6,597)		(785)
Capitalized software development costs	(5,514)		(4,914)

Net cash provided by (used in) investing activities	16,376		(19,504)
Cash flows from financing activities:


Repurchases of common shares	(97,153)		—







Proceeds from exercise of stock options and ESPP	—		547

Net cash provided by (used in) financing activities	(97,153)		547
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(458)		110
Net increase (decrease) in cash, cash equivalents and restricted cash	(24,914)		24,684
Cash, cash equivalents and restricted cash, beginning of period	369,303		360,793
Cash, cash equivalents and restricted cash, end of period	$	344,389	$	385,477
Supplemental disclosure of non-cash investing and financing activities:

Property and equipment acquired and included in accounts payable and accrued liabilities	$	935	$	98

Stock-based compensation for capitalized software development	$	513	$	634


			Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)

Cash Equivalents:
Money market funds	$	124,036	$	124,036	$	—	$	—






Investments:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level II)		Significant Unobservable Inputs (Level III)
Corporate bonds and commercial paper	$	16,973	$	—	$	16,973	$	—
Certificates of deposit	7,656		—		7,656		—
U.S. government securities	11,243		—		11,243		—
	$	35,872	$	—	$	35,872	$	—


Cash Equivalents:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Money market funds	$	124,036	$	—	$	—	$	124,036




Investments:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds and commercial paper	$	16,977	$	4	$	(8)	$	16,973
Certificates of deposit	7,655		1		—		7,656
U.S. government securities	11,240		4		(1)		11,243
	$	35,872	$	9	$	(9)	$	35,872


	March 31, 2026		December 31, 2025
Due within one year or less	$	30,221	$	58,782
Due after one year through two years	5,651		5,595
	$	35,872	$	64,377


	Less than 12 months				12 months or greater
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Corporate bonds and commercial paper	$	10,187	$	(8)	$	—	$	—

U.S. government securities	—		—		1,247		(1)
	$	10,187	$	(8)	$	1,247	$	(1)


	As of March 31, 2026						As of December 31, 2025
	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount

Acquired technology	$	117,737	$	(105,829)	$	11,908	$	117,737	$	(101,481)	$	16,256

Capitalized software development costs	109,910		(46,037)		63,873		103,884		(41,763)		62,121
	$	227,647	$	(151,866)	$	75,781	$	221,621	$	(143,244)	$	78,377


	Amortization
Year Ended December 31,
2026 (April 1 to December 31)	$	26,810
2027	20,750
2028	14,525
2029	9,068
2030	4,281
Thereafter	347
Total amortization	$	75,781


	Operating Leases
Year Ended December 31,
2026 (April 1 to December 31)	$	7,870
2027	9,659
2028	6,452
2029	4,947
2030	5,050
Thereafter	13,472
Total lease payments	47,450
Less: imputed interest	(7,230)
Total operating lease liabilities	$	40,220


	Contractual Commitments
Year Ended December 31,
2026 (April 1 to December 31)	$	357,157
2027	89,886
2028	57,659
2029	215
2030	—
Thereafter	—
Total commitments	$	504,917


	Date Issued	Maturity Date (1)	Principal		Interest Rate per Annum		Conversion Rate for Each $1,000 Principal (2)		Initial Conversion Price per Share
2026 Notes	June 1, 2019	June 1, 2026	$	303,995	0.75	%	$	11.2851	$	88.61


	Three Months Ended March 31,				Change
	2026		2025		$		(%)
Revenues	$	216,506	$	189,735	$	26,771	14.1	%


	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Approximate Dollar Value of Shares That May Be Purchased Under the Plans or Programs (in thousands)(1)
January 1 - 31, 2026	336,497	$	66.85	336,497	$	122,500
February 1 - 28, 2026	768,208	55.30		768,208	80,000
March 1 - 31, 2026	659,877	48.71		659,877	47,847
Total	1,764,582	$	55.04	1,764,582


Exhibit Number		Description of Document

3.1	*	Fifth Amended and Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2019).

3.2	*	Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.2 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2019).

31.1	**	Certification of Chief Executive Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	**	Certification of Chief Financial Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	#	Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer.

32.2	#	Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Financial Officer.

101.INS	**	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	**	Inline XBRL Taxonomy Extension Schema Document.

101.CAL	**	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF	**	Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB	**	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE	**	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104	**	Cover Page Interactive Data File (embedded within the Inline XBRL document)


Date: April 29, 2026						/s/ MATTHEW P. FLAKE
						Matthew P. Flake
						President, Chief Executive Officer and Chairman
						(Principal Executive Officer)


Date: April 29, 2026						/s/ JONATHAN A. PRICE
						Jonathan A. Price
						Chief Financial Officer
						(Principal Financial and Accounting Officer)