Q2 Holdings reported higher revenue and profits for the third quarter, with improved margins and cash generation. The digital-banking software provider also raised its 2026 revenue and adjusted EBITDA guidance and named Chief Financial Officer Jonathan Price co-CEO, sharing leadership with Matt Flake.
Key details
-
Revenue reached $225.8 million, up 12% from the year-earlier quarter and 3% from the second quarter of 2026.
-
GAAP net income was $33.2 million, compared with $15.0 million a year earlier and $29.9 million in the prior quarter.
-
GAAP gross margin rose to 59.7%, from 54.0% a year earlier and 59.2% in the second quarter. Non-GAAP gross margin was 62.6%, versus 57.9% a year earlier and 62.3% in the prior quarter.
-
Adjusted EBITDA increased to $67.8 million, from $48.8 million a year earlier and $62.8 million in the second quarter. Q2 reported an adjusted EBITDA margin of 30%, which it described as a record.
-
The company said quarterly revenue and adjusted EBITDA exceeded the high end of its guidance. It raised its full-year 2026 guidance for both measures; the announcement provided here does not include the revised targets.
-
Free cash flow was $55.0 million. Q2 repurchased $38.8 million of its shares during the quarter and said it remained debt-free.
-
Q2 cited solid bookings led by digital banking and continued momentum across the business. Credit unions were a key contributor, including multiple Tier 1 wins and some of the quarter’s largest contracted deals. The company also reported strong early-adopter sign-ups for its AI-driven fraud solution—roughly twice its initial expectation—as it moves the offering toward general availability.
-
Price becomes co-CEO effective October 29, serving alongside Flake, who remains president and chairman of the board. Price will also join the board and continue as CFO while Q2 searches for a successor.
What changes
Q2 will have two co-CEOs, while Price temporarily retains the CFO role during the search for his replacement. The quarter’s share repurchases and debt-free status indicate that Q2 returned capital to shareholders while maintaining a balance sheet without debt.