Q2 Holdings Reports Third Quarter 2026 Results, Delivers Strong Revenue Growth and Appoints Jonathan Price as Co-CEO
Q2 Holdings, Inc. (Q2), a leading provider of digital transformation solutions for financial services, announced its financial results for the third quarter ended September 30, 2026, reporting strong revenue growth, improved profitability, expanding margins and continued demand for its digital banking technology. The company also announced the appointment of Chief Financial Officer Jonathan Price as Co-Chief Executive Officer, effective October 29, 2026, marking an important development in its leadership structure.
Q2’s third-quarter performance reflected continued momentum across its digital banking business, particularly among credit unions and larger financial institutions. The company reported growth in both generally accepted accounting principles (GAAP) and non-GAAP financial measures, supported by solid customer bookings, increased recurring revenue and expanding demand for solutions that help financial institutions modernize their operations.
The company’s latest results also highlighted its growing focus on artificial intelligence (AI), fraud prevention and automation. Through its digital banking platform, Q2 continues to develop technology intended to help banks and credit unions improve customer experiences, streamline internal processes and address emerging financial services challenges.
Q2 Holdings Reports Strong Third-Quarter Financial Performance
Q2 reported third-quarter revenue of $225.8 million, representing a 12% increase from the corresponding period in 2025 and a 3% increase compared with the second quarter of 2026. The growth demonstrated continued demand for the company’s digital banking solutions and its ability to expand revenue across its financial services customer base.
The company’s GAAP gross margin reached 59.7% in the third quarter, compared with 54.0% in the prior-year quarter and 59.2% in the second quarter of 2026. The year-over-year improvement reflected stronger profitability, while the sequential increase indicated continued progress in managing costs relative to revenue.
GAAP net income increased significantly to $33.2 million, compared with $15.0 million in the third quarter of 2025. Net income also increased from $29.9 million in the second quarter of 2026. The results reflected a substantial improvement in the company’s reported profitability over both comparison periods.
Q2’s performance was not limited to revenue expansion. The company also reported higher non-GAAP gross margins and adjusted EBITDA, indicating that its revenue growth was accompanied by improvements in operating performance.
These results are important for a technology provider serving banks, credit unions and other financial institutions, where customers increasingly seek scalable digital solutions that can support a broad range of banking activities without requiring proportionate increases in operating costs.
Non-GAAP Results Highlight Expanding Margins
Q2 reported a non-GAAP gross margin of 62.6% for the third quarter of 2026, compared with 57.9% in the same period last year and 62.3% in the second quarter of 2026.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $67.8 million, up from $48.8 million in the third quarter of 2025 and $62.8 million in the second quarter of 2026.
The company also reported a record adjusted EBITDA margin of 30%, demonstrating its ability to generate higher adjusted operating earnings as revenue expands.
Non-GAAP measures provide an additional perspective on operating performance by excluding certain items that management considers outside its assessment of ongoing business operations. These measures complement, rather than replace, financial results prepared in accordance with GAAP.
Q2’s third-quarter results exceeded the upper end of management’s guidance for both revenue and adjusted EBITDA. The performance reinforced management’s confidence in the company’s business model, financial flexibility and growth opportunities.
The combination of higher revenue, improved margins and stronger adjusted earnings suggests that Q2 continues to benefit from operating scale while investing in its digital banking platform and emerging technology offerings.
CEO Matt Flake Highlights Customer Demand and AI Momentum
Matt Flake, Chairman, President and Chief Executive Officer of Q2, said the company delivered another strong quarter, supported by solid bookings led by digital banking and continued momentum across its business.
Flake highlighted credit unions as an important contributor to the company’s performance. During the quarter, Q2 secured multiple Tier 1 wins and several of its largest contracted deals, reflecting continued demand among financial institutions for digital banking technology.
The company’s commercial digital banking business also contributed to contract activity, including new agreements with major financial institutions. These wins demonstrate Q2’s ability to serve organizations with complex requirements and support their digital transformation initiatives.
Flake also emphasized the company’s progress in artificial intelligence, particularly following its third annual Dev Days event. The event brought together customers, partners and developers to explore how Q2’s platform can support the development and deployment of new financial technology capabilities.
One of the most notable developments was the early response to Q2’s AI-driven User Activity Monitoring solution. The company’s early-adopter program attracted nearly 20 financial institutions, approximately twice the number initially expected.
According to Flake, Q2 remains encouraged by its momentum as it prepares to make new AI offerings generally available. The company also reported a healthy sales pipeline heading into the final months of 2026.
Management believes these developments position Q2 to become an important technology platform for financial institutions seeking to integrate AI into their operations while building on existing data, workflows and customer relationships.
Jonathan Price Highlights Cash Flow and Financial Flexibility
Jonathan Price, Q2’s Chief Financial Officer, said the company exceeded the high end of its third-quarter guidance for revenue and adjusted EBITDA.
Price pointed to the company’s record gross margin and record adjusted EBITDA margin of 30% as evidence of continued operating scalability.
Q2 generated $55.0 million in free cash flow during the quarter, providing additional financial flexibility to support its business priorities. Free cash flow is an important measure for technology companies because it indicates the cash available after accounting for capital expenditures and can support investments, share repurchases and other corporate activities.
The company also repurchased $38.8 million of its shares during the period. At the same time, Q2 remained debt-free, maintaining a balance sheet that management believes provides flexibility as the company pursues its growth strategy.
The combination of positive cash generation, share repurchases and the absence of debt underscores Q2’s focus on maintaining financial strength while investing in technology development and customer acquisition.
Price said the company’s third-quarter performance, together with its outlook for the remainder of the year, supported an increase in its full-year 2026 guidance for both revenue and adjusted EBITDA.
The revised outlook reflects management’s confidence in the company’s growth trajectory and its ability to continue improving profitability as demand for digital banking solutions expands.
Q2 Appoints Jonathan Price as Co-Chief Executive Officer
Alongside the financial results, Q2 announced that its Board of Directors had appointed Jonathan Price as Co-Chief Executive Officer, effective October 29, 2026.
Price will serve as Co-CEO alongside Matt Flake, who will continue in his roles as President and Chairman of the Board. Price will also join Q2’s Board of Directors as part of his appointment.
The leadership change represents a significant development for the company as it continues to expand its digital banking business and pursue opportunities in artificial intelligence, fraud prevention and financial services automation.
Price will retain his responsibilities as Chief Financial Officer while Q2 conducts a search for his successor. This arrangement allows the company to maintain continuity in its financial leadership while beginning the transition to the new executive structure.
Price’s appointment comes as Q2 reports improved profitability, strong customer bookings and increased demand for its technology offerings. His existing experience as CFO provides familiarity with the company’s financial performance, operating priorities and long-term business objectives.
The appointment also creates an opportunity for Q2 to align its financial strategy with its broader operational and technology priorities as the business continues to evolve.
Additional information about the leadership appointment was made available through a separate press release published in the investor relations section of Q2’s website at http://investors.Q2.com.
Seven Enterprise and Tier 1 Contracts Signed During the Quarter
Q2 signed seven Enterprise and Tier 1 contracts during the third quarter of 2026, highlighting continued customer demand across its digital banking and risk management offerings.
One significant agreement involved a new Tier 1 credit union customer for Q2’s commercial digital banking solutions. The agreement expands the company’s presence among larger credit unions seeking technology to support commercial banking services.
Q2 also secured a new agreement with a Tier 1 bank for its commercial digital banking solutions following the institution’s merger with another financial organization.
Mergers can create technology integration challenges for financial institutions, including the need to consolidate systems, standardize customer experiences and support commercial clients across an expanded organizational structure. Digital banking platforms can help institutions address these requirements by providing tools for managing financial activities through integrated digital channels.
Another notable agreement involved an expansion with an Enterprise bank that plans to add multiple risk and fraud solutions. The expanded relationship includes Q2’s AI-driven User Activity Monitoring solution.
The agreement reflects the growing importance of digital risk management as financial institutions expand online services and face increasingly complex security requirements.
Banks and credit unions must monitor user activity, identify potentially suspicious behavior and protect customer accounts while maintaining convenient digital experiences. Technology designed to support these activities can help institutions strengthen their oversight and respond to emerging threats.
The seven contracts signed during the quarter demonstrate Q2’s ability to secure new customers while expanding relationships with existing enterprise clients.
Subscription Recurring Revenue Reaches $846 Million
Q2’s Subscription Annualized Recurring Revenue (ARR) increased to $846.0 million at the end of the third quarter, representing year-over-year growth of 13.5%.
Subscription ARR provides an annualized view of recurring subscription revenue based on the company’s applicable reporting methodology. It is a key indicator of the scale of a subscription-based business and the potential visibility provided by continuing customer relationships.
The increase reflects ongoing demand for Q2’s digital banking platform and related services. As financial institutions invest in digital transformation, recurring technology agreements can provide vendors with more predictable revenue while allowing customers to access and maintain technology services over time.
Q2 also reported growth in its remaining performance obligations, commonly referred to as backlog. Total committed backlog increased by approximately $5 million sequentially and $248 million year over year.
At quarter-end, the company’s committed backlog stood at approximately $2.8 billion, representing 10% year-over-year growth.
Remaining performance obligations generally reflect contracted revenue that has not yet been recognized, subject to the company’s applicable accounting policies and contractual terms. Although backlog does not necessarily convert into revenue immediately or in full, it provides an indication of future contracted business activity.
The increase in backlog supports management’s view that customer demand remains healthy and provides a foundation for future revenue recognition as contractual obligations are fulfilled.
Dev Days 2026 Showcases AI Applications in Banking
Q2 recently hosted its third annual Dev Days event, bringing together hundreds of customers, partners and developers who build on the company’s platform.
The event highlighted how artificial intelligence is moving beyond experimentation and becoming integrated into the daily work of financial institutions. Q2 presented new and expanded capabilities designed to help development teams build software more efficiently, assist employees with complex tasks and strengthen fraud monitoring.
A major focus was the expanded Q2 Code offering. The company previewed capabilities intended to extend beyond code generation into planning, testing and deployment.
By incorporating platform knowledge and established best practices, Q2 Code is designed to help smaller development teams work more efficiently. The objective is to reduce the effort required to build and maintain digital experiences, allowing financial institutions to devote more resources to features that distinguish their services from competitors.
For banks and credit unions, development efficiency can be especially important as they work to modernize legacy systems, introduce new customer-facing tools and respond to changing expectations around digital banking.
Q2 also previewed new capabilities for Q2 Assistant. These features are being designed to help financial institution employees complete multi-step customer service and back-office tasks rather than simply retrieve information.
The distinction is important because AI assistants that can support workflows may help employees manage routine activities, access relevant information and complete tasks more efficiently. Such capabilities could support operational productivity while allowing staff to focus on customer needs and more complex decisions.
Q2’s approach centers on integrating AI into its existing platform, where financial institutions already manage data, workflows and customer interactions.
The company believes this approach can help financial institutions adopt AI within established technology environments rather than relying entirely on separate tools operating outside their core workflows.
AI-Driven Fraud Monitoring Attracts Early-Adopter Interest
Q2’s User Activity Monitoring solution was another major highlight of Dev Days 2026.
The company’s early-adopter program attracted nearly 20 financial institutions, approximately twice the number initially anticipated. The response suggests that banks and credit unions are showing interest in technology designed to help monitor digital activity and identify potential fraud risks.
Financial institutions face ongoing challenges in protecting online accounts and digital services. As customers increasingly rely on mobile and online banking, institutions must monitor activity across digital channels while balancing security, convenience and operational efficiency.
AI-driven monitoring tools can potentially help identify unusual patterns and support the investigation of suspicious behavior. However, their effectiveness depends on factors such as data quality, system integration, model performance and the institution’s risk management processes.
Q2’s early-adopter results indicate encouraging initial interest, although broader commercial adoption and long-term outcomes will become clearer as the product moves toward general availability.
The company expects to bring its new AI offerings to general availability in the coming months. This development could create additional opportunities to expand customer relationships and introduce new capabilities across its existing financial institution network.
Q2 entered the final quarter of 2026 with positive momentum across its core digital banking business, growing recurring revenue, increased backlog and continued interest in its AI-driven offerings.
The company raised its full-year 2026 guidance for revenue and adjusted EBITDA following its stronger-than-expected third-quarter performance. Although the updated numerical guidance was not included in the supplied announcement, management indicated that its latest results and business outlook support greater confidence in its financial expectations for the year.
Q2’s growth strategy continues to center on providing digital banking solutions that help financial institutions modernize their services, improve operational efficiency and manage risk. Its expanding AI capabilities provide another potential avenue for growth as banks and credit unions explore practical applications for automation and intelligent assistance.
The company’s financial position also offers flexibility. Strong free cash flow, continued profitability and a debt-free balance sheet provide resources to support technology development, customer relationships and capital allocation priorities.
At the same time, the company’s performance will depend on its ability to maintain customer demand, convert contracted backlog into recognized revenue, execute its AI product strategy and manage the transition to its new leadership structure.
Q2 Positions Its Platform for the Next Phase of Digital Banking
Q2’s third-quarter 2026 results demonstrate continued growth in revenue, profitability and recurring subscription business. Revenue increased 12% year over year to $225.8 million, GAAP net income rose to $33.2 million, and adjusted EBITDA reached $67.8 million.
The company also reported a 30% adjusted EBITDA margin, generated $55.0 million in free cash flow and repurchased $38.8 million in shares while remaining debt-free.
Commercial momentum was supported by seven Enterprise and Tier 1 contracts, Subscription ARR of $846.0 million and approximately $2.8 billion in committed backlog.
The appointment of Jonathan Price as Co-CEO alongside Matt Flake adds a major leadership development to the quarter’s announcements. Meanwhile, growing interest in Q2’s AI-powered development, assistance and fraud monitoring capabilities highlights the company’s efforts to extend its platform beyond traditional digital banking functions.
As financial institutions continue investing in digital services, automation and fraud prevention, Q2 is seeking to strengthen its role as a technology partner for banks and credit unions. Its ability to convert early AI interest into broader adoption, sustain customer bookings and maintain improving margins will be important factors shaping its performance in the coming quarters.
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