qtwo-20260630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-36350

Q2 Holdings, Inc.

Exact Name of Registrant as Specified in its Charter

Delaware

20-2706637

State or Other Jurisdiction of
Incorporation or Organization

I.R.S. Employer Identification No.

10355 Pecan Park Boulevard

Austin,

Texas

78729

Address of Principal Executive Offices

Zip Code

(833) 444-3469

Registrant's Telephone Number, Including Area Code

Not Applicable

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

QTWO

New York Stock Exchange

Common Stock, $0.0001 par value

QTWO

NYSE Texas

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 62,354,695 shares of Common Stock, $0.0001 par value per share as of July 29, 2026.

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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.	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	39

Item 4.	Controls and Procedures.	40

PART II: OTHER INFORMATION

Item 1.	Legal Proceedings.	41

Item 1A.	Risk Factors.	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	41

Item 3.	Defaults Upon Senior Securities.	41

Item 4.	Mine Safety Disclosures.	41

Item 5.	Other Information.	41

Item 6.	Exhibits.	42

SIGNATURES		44

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Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to our management. The statements and information contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. You can identify these statements by words such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "seeks," "potential," "predicts," "projects," "should," "will," "strategy," "future," "likely," or "would" or the negative of these terms or similar expressions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations. Factors that could cause or contribute to such differences include, but are not limited to, the following:

•the risks associated with cyberattacks, financial transaction fraud, data and privacy breaches and breaches of security measures within our products, systems and infrastructure or the products, systems and infrastructure of third parties upon which we rely and the resultant disruption, costs and liabilities and harm to our business and reputation and our ability to sell our solutions;

•the risks associated with rapidly evolving technologies, such as quantum computing, and advances in artificial intelligence, or AI, including the increasing availability of more capable AI models to the public that may further enhance the ability of threat actors or autonomous AI agent systems to identify, develop and exploit vulnerabilities, automate certain aspects of cyberattacks and conduct more targeted or scalable social engineering, fraud schemes or end-to-end intrusions;

•the impact of and our ability to respond to global economic uncertainties and challenges or changes in the financial services industry and credit markets, including as a result of mergers and acquisitions within the banking sector, inflationary pressures, fluctuating interest rates, instability in the financial services industry, any changes to, or new, financial regulations and their potential impacts on our prospects' and customers' operations, increased acceptance and use of emerging financial products, such as cryptocurrencies or stablecoin, including any impact on the timing of prospect and customer implementations and purchasing decisions, our business sales cycles and on account holder or end user, or End User, usage of our solutions;

•the risks associated with continued market volatility, including in the financial services sector, potential inflationary pressures and the impact of any monetary policy changes that may be implemented as a result, the possibility and potential impact of any U.S. tariffs and global trade measures, including retaliatory tariffs and the impact on the valuation of marketable securities;

•the risk of increased or new competition in our existing markets and as we enter new markets or new segments of existing markets, or as we offer new solutions;

•the risks associated with the development of our solutions, including AI-based solutions, our AI and data strategies and solutions, our use of AI tools and solutions, changes to regulation related to AI and data privacy and any discordance between the market for our solutions compared to our expectations;

•quarterly fluctuations in our operating results relative to our expectations and guidance and the accuracy of our forecasts;

•the risks and increased costs associated with managing growth and global operations, including hiring, training, retaining and motivating employees to support such growth;

•the risks associated with our transactional business which are typically driven by End-User behavior and can be influenced by external drivers outside of our control;

•the risks associated with effectively managing our business and cost structure in an uncertain economic environment, including as a result of challenges in the financial services industry and the effects of seasonality and unexpected trends;

•the risks associated with geopolitical instability, including acts of war or military conflict, uncertainties or discord, including the continuing war in Ukraine, the war in Iran and other conflicts in the Middle East and other parts of the world, heightened risk of state-sponsored cyberattacks or cyber fraud on financial services and other critical infrastructure;

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•the risks associated with accurately forecasting and managing the impacts of any economic downturn or challenges in the financial services industry on our customers and their End Users, including in particular the impacts of any downturn on financial technology companies, or FinTechs, or alternative finance companies, or Alt-FIs, and our arrangements with them, which may include more complex revenue arrangements for us and which may be more vulnerable to an economic downturn than our financial institution customers;

•the challenges and costs associated with selling, implementing and supporting our solutions, particularly for larger customers with more complex requirements and longer implementation processes, including risks related to the timing and predictability of sales of our solutions and the impact that the timing of bookings and go-lives may have on our revenue and financial performance in a period;

•the risk that errors, interruptions or delays in our solutions or Web hosting negatively impacts our business and sales;

•the risks associated with the operation of and reliance on third-party public cloud service providers, including any transition, integration, resiliency, performance or cost risks following migration;

•the difficulties and risks associated with developing and selling complex new solutions and enhancements, including those using AI, in an environment in which the technical and regulatory specifications and functionality required by our customers and relevant governmental authorities are difficult to predict;

•the risks associated with operating within and selling into a regulated industry, including risks related to the rapidly evolving regulation of, and litigation with respect to, AI and machine learning, the receipt, collection, storage, processing and transfer of data and increased regulatory scrutiny on financial technology and related services, including specifically on banking-as-a-service, or BaaS, services;

•the risks associated with our sales and marketing capabilities, including partner relationships and the length, cost and unpredictability of our sales cycle;

•the risks inherent in third-party technology and implementation partnerships, including defects, failures, interruptions or disruptions in third-party services or solutions, that could disrupt our services or otherwise cause harm to our business;

•the risks associated with our reliance on a limited number of third-party AI vendors and concentration in such relationships, including potential disruption of hosted AI services, pricing increases, contractual limitations or the loss of access to key AI capabilities;

•the risk that we will not be able to maintain historical contract terms such as pricing and duration;

•the general risks associated with the complexity of our customer arrangements and our solutions;

•the risks associated with integrating acquired companies and successfully selling and maintaining their solutions;

•the risks and challenges around increased regulatory scrutiny and evolving requirements for money movement services and the resulting potential higher costs, increased complexity and limitations on offerings on our business and financial results;

•litigation related to intellectual property and other matters and any related claims, negotiations and settlements;

•the risks associated with further consolidation in the financial services industry;

•the risks associated with selling our solutions internationally and with the continued expansion of our international operations;

•the risk that we may not be able to obtain capital when desired or needed on favorable terms; and

•such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, or the SEC, including the risk factors discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in the section titled "Risk Factors," and the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 11, 2026.

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Q2 HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)


	June 30, 2026		December 31, 2025
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	99,917	$	367,631
Restricted cash	2,218		1,672
Investments	6,508		65,064
Accounts receivable, net	70,514		51,716
Contract assets, current portion, net	8,702		8,596
Prepaid expenses and other current assets	20,434		28,234
Deferred solution and other costs, current portion	25,206		22,631
Deferred implementation costs, current portion	10,972		10,508
Total current assets	244,471		556,052
Property and equipment, net	27,843		27,783
Right of use assets	26,754		27,188
Deferred solution and other costs, net of current portion	29,914		27,827
Deferred implementation costs, net of current portion	33,344		28,929
Intangible assets, net	73,446		78,377
Goodwill	512,869		512,869
Contract assets, net of current portion and allowance	16,144		14,103
Other long-term assets	3,633		3,149
Total assets	$	968,418	$	1,276,277
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	16,351	$	20,473
Accrued liabilities	22,507		24,572
Accrued compensation	24,475		31,754
Convertible notes, current portion	—		303,368
Deferred revenues, current portion	186,789		155,003
Lease liabilities, current portion	8,691		8,915
Total current liabilities	258,813		544,085

Deferred revenues, net of current portion	24,181		26,826
Lease liabilities, net of current portion	32,242		33,832
Other long-term liabilities	9,728		9,723
Total liabilities	324,964		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 June 30, 2026 and December 31, 2025	—		—
Common stock: $0.0001 par value; 150,000 shares authorized, 62,360 issued and outstanding as of June 30, 2026 and 62,741 shares issued and outstanding as of December 31, 2025	6		6

Additional paid-in capital	1,201,853		1,275,980
Accumulated other comprehensive loss	(2,680)		(1,953)
Accumulated deficit	(555,725)		(612,222)
Total stockholders' equity	643,454		661,811
Total liabilities and stockholders' equity	$	968,418	$	1,276,277

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Q2 HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Revenues	$	219,765	$	195,148	$	436,271	$	384,883
Cost of revenues	89,565		90,584		178,157		179,329
Gross profit	130,200		104,564		258,114		205,554
Operating expenses:
Sales and marketing	25,944		27,037		51,664		53,564
Research and development	41,115		36,914		82,995		74,767
General and administrative	33,068		31,034		65,255		63,356
Transaction-related costs	20		—		270		—
Amortization of acquired intangibles	—		—		—		93
Lease and other restructuring charges	712		(261)		900		1,745
Total operating expenses	100,859		94,724		201,084		193,525
Income from operations	29,341		9,840		57,030		12,029
Other income (expense):
Interest and other income	3,405		5,003		6,674		9,589
Interest and other expense	(1,029)		(1,346)		(2,234)		(2,881)

Total other income, net	2,376		3,657		4,440		6,708
Income before income taxes	31,717		13,497		61,470		18,737
Provision for income taxes	(1,859)		(1,733)		(4,973)		(2,220)
Net income	$	29,858	$	11,764	$	56,497	$	16,517
Other comprehensive income (loss):
Unrealized loss on available-for-sale investments	(1)		(53)		(61)		(77)
Foreign currency translation adjustment	(44)