The company has achieved significant operating leverage, with gross margins expanding from 49.7% in 2024Q1 to 59.1% by 2026Q1, signaling improved efficiency in its software subscription model.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 |
|---|
| Sales/Revenue | 821.58M | 794.81M | 696.46M | 624.62M | 565.67M | 498.72M | 402.75M | 315.48M | 241.1M | 193.98M | 150.22M | 108.87M | 79.13M | 56.87M | 41.1M | 26.98M |
| Revenue Growth % | 14% | 14.12% | 11.5% | 10.42% | 13.43% | 23.83% | 27.66% | 30.85% | 24.29% | 29.13% | 37.99% | 37.58% | 39.14% | 38.37% | 52.33% | - |
| Cost of Goods Sold | 364.97M | 365.22M | 341.98M | 321.97M | 309.33M | 273.69M | 228.15M | 162.49M | 121.86M | 99.48M | 77.43M | 59.13M | 46.05M | 36.26M | 25.17M | 14.79M |
| COGS % of Revenue | - | 45.95% | 49.1% | 51.55% | 54.68% | 54.88% | 56.65% | 51.5% | 50.54% | 51.29% | 51.54% | 54.31% | 58.2% | 63.76% | 61.24% | 54.83% |
| Gross Profit | 456.61M | 429.59M | 354.48M | 302.65M | 256.35M | 225.03M | 174.6M | 153M | 119.25M | 94.49M | 72.8M | 49.74M | 33.08M | 20.61M | 15.93M | 12.19M |
| Gross Margin % | 55.58% | 54.05% | 50.9% | 48.45% | 45.32% | 45.12% | 43.35% | 48.5% | 49.46% | 48.71% | 48.46% | 45.69% | 41.8% | 36.24% | 38.76% | 45.17% |
| Gross Profit Growth % | - | 21.19% | 17.13% | 18.06% | 13.91% | 28.89% | 14.12% | 28.31% | 26.19% | 29.81% | 46.35% | 50.38% | 60.47% | 29.38% | 30.72% | - |
| Operating Expenses | 389.33M | 383.95M | 396.74M | 388.71M | 361.11M | 303.03M | 274.43M | 203.72M | 146.95M | 120.17M | 102.21M | 72.09M | 52.15M | 37.73M | 23.06M | 13.87M |
| OpEx % of Revenue | - | 48.31% | 56.97% | 62.23% | 63.84% | 60.76% | 68.14% | 64.57% | 60.95% | 61.95% | 68.04% | 66.21% | 65.9% | 66.35% | 56.1% | 51.42% |
| Selling, General & Admin | 230.43M | 231.37M | 228.89M | 219.71M | 198.38M | 163.48M | 145.44M | 121.11M | 93.77M | 78.35M | 68.28M | 49.98M | 40.06M | 28.7M | 17.74M | 10.45M |
| SG&A % of Revenue | - | 29.11% | 32.87% | 35.17% | 35.07% | 32.78% | 36.11% | 38.39% | 38.89% | 40.39% | 45.45% | 45.91% | 50.63% | 50.47% | 43.17% | 38.71% |
| Research & Development | 158.36M | 154.33M | 143.24M | 137.33M | 130.1M | 116.95M | 97.38M | 76.27M | 51.33M | 40.34M | 32.46M | 21.53M | 12.09M | 9.03M | 5.32M | 3.43M |
| R&D % of Revenue | - | 19.42% | 20.57% | 21.99% | 23% | 23.45% | 24.18% | 24.18% | 21.29% | 20.8% | 21.61% | 19.78% | 15.27% | 15.88% | 12.94% | 12.7% |
| Other Operating Expenses | 542K | 0 | 24.61M | 31.67M | 32.63M | 22.6M | 31.61M | 6.34M | -7.35M | 429K | -209K | -3K | -492K | 0 | 0 | 0 |
| Operating Income | 67.28M | 45.64M | -42.26M | -86.06M | -104.76M | -78M | -99.83M | -50.72M | -31.85M | -26.91M | -35.72M | -24.84M | -19.07M | -17.12M | -7.13M | -1.69M |
| Operating Margin % | 8.19% | 5.74% | -6.07% | -13.78% | -18.52% | -15.64% | -24.79% | -16.08% | -13.21% | -13.87% | -23.78% | -22.82% | -24.1% | -30.11% | -17.34% | -6.25% |
| Operating Income Growth % | - | 207.99% | 50.89% | 17.85% | -34.32% | 21.87% | -96.84% | -59.24% | -18.37% | 24.67% | -43.79% | -30.25% | -11.38% | -140.21% | -322.53% | - |
| EBITDA | 114.99M | 115.06M | 26.55M | -950K | -43.1M | -23.16M | -47.99M | -14.56M | -11.11M | -12.63M | -23.52M | -17.99M | -14.99M | -14.15M | -5.43M | -674K |
| EBITDA Margin % | 14% | 14.48% | 3.81% | -0.15% | -7.62% | -4.64% | -11.92% | -4.62% | -4.61% | -6.51% | -15.66% | -16.53% | -18.94% | -24.88% | -13.21% | -2.5% |
| EBITDA Growth % | 176.93% | 333.45% | 2894.32% | 97.8% | -86.09% | 51.74% | -229.58% | -31.12% | 12.04% | 46.32% | -30.71% | -20.05% | -5.91% | -160.56% | -705.79% | - |
| D&A (Non-Cash Add-back) | 47.71M | 69.42M | 68.81M | 85.11M | 61.66M | 54.83M | 51.84M | 36.16M | 20.74M | 14.28M | 12.2M | 6.85M | 4.08M | 2.97M | 1.7M | 1.01M |
| EBIT | 77.77M | 45.64M | -25.92M | -56.09M | -99.4M | -78.03M | -107.56M | -63.07M | -29.04M | -26.35M | -35.36M | -24.56M | -19.01M | -17.12M | -7.12M | -1.68M |
| Net Interest Income | 13.84M | 14.83M | 11.4M | 4.37M | -1.31M | -31.59M | -27.44M | -16.62M | -7.35M | 429K | -209K | -3K | -492K | -499K | -228K | -76K |
| Interest Income | 18.92M | 20.24M | 16.34M | 10.1M | 5.36M | 1.48M | 1.21M | 3.67M | 2.81M | 553K | 358K | 280K | 65K | 6K | 4K | 7K |
| Interest Expense | 5.08M | 5.41M | 4.94M | 5.73M | 6.68M | 33.07M | 28.65M | 20.29M | 10.16M | 124K | 567K | 283K | 557K | 505K | 232K | 83K |
| Other Income/Expense | 11.96M | 9.09M | 11.4M | 24.23M | -1.31M | -33.11M | -36.37M | -32.65M | -7.35M | 429K | -209K | -3K | -492K | -499K | -228K | -76K |
| Pretax Income | 79.24M | 54.73M | -30.86M | -61.82M | -106.08M | -111.1M | -136.2M | -83.36M | -39.2M | -26.48M | -35.93M | -24.84M | -19.56M | -17.62M | -7.36M | -1.76M |
| Pretax Margin % | 9.64% | 6.89% | -4.43% | -9.9% | -18.75% | -22.28% | -33.82% | -26.42% | -16.26% | -13.65% | -23.92% | -22.82% | -24.72% | -30.98% | -17.9% | -6.53% |
| Income Tax | 5.34M | 2.72M | 7.68M | 3.56M | 2.91M | 1.64M | 1.42M | -12.49M | -3.8M | -314K | 427K | 220K | 71K | 55K | 164K | 132K |
| Effective Tax Rate % | 6.74% | 4.96% | -24.87% | -5.76% | -2.74% | -1.48% | -1.04% | 14.98% | 9.7% | 1.19% | -1.19% | -0.89% | -0.36% | -0.31% | -2.23% | -7.49% |
| Net Income | 73.89M | 52.01M | -38.54M | -65.38M | -108.98M | -112.75M | -137.62M | -70.88M | -35.4M | -26.16M | -36.35M | -25.06M | -19.63M | -17.88M | -8.78M | -3.03M |
| Net Margin % | 8.99% | 6.54% | -5.53% | -10.47% | -19.27% | -22.61% | -34.17% | -22.47% | -14.68% | -13.49% | -24.2% | -23.02% | -24.81% | -31.43% | -21.36% | -11.22% |
| Net Income Growth % | 470.58% | 234.96% | 41.06% | 40.01% | 3.34% | 18.07% | -94.17% | -100.23% | -35.29% | 28.03% | -45.05% | -27.65% | -9.84% | -103.61% | -190.02% | - |
| Net Income (Continuing) | 73.89M | 52.01M | -38.54M | -65.38M | -108.98M | -112.75M | -137.62M | -70.88M | -35.4M | -26.16M | -36.35M | -25.06M | -19.63M | -17.68M | -7.52M | -1.9M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.09 | 0.80 | -0.64 | -1.12 | -1.90 | -2.00 | -2.65 | -1.53 | -0.83 | -0.63 | -0.92 | -0.67 | -0.67 | -1.37 | -0.74 | -0.26 |
| EPS Growth % | 422.3% | 225% | 42.86% | 41.05% | 5% | 24.53% | -73.2% | -84.34% | -31.75% | 31.52% | -37.31% | 0% | 51.09% | -85.14% | -184.62% | - |
| EPS (Basic) | - | 0.84 | -0.64 | -1.12 | -1.90 | -2.00 | -2.65 | -1.53 | -0.83 | -0.63 | -0.92 | -0.67 | -0.67 | -1.37 | -0.77 | -0.26 |
| Diluted Shares Outstanding | 67.65M | 65.12M | 60.1M | 58.35M | 57.3M | 56.39M | 52.02M | 46.2M | 42.8M | 41.22M | 39.65M | 37.27M | 29.26M | 13.08M | 11.79M | 11.79M |
| Basic Shares Outstanding | 62.34M | 62.16M | 60.1M | 58.35M | 57.3M | 56.39M | 52.02M | 46.2M | 42.8M | 41.22M | 39.65M | 37.27M | 29.26M | 13.08M | 11.35M | 11.79M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Regional bank consolidation risk
According to the provided financial data, Q2 Holdings has maintained a steady revenue growth trajectory, recording a 14.1% year-over-year increase in 2026Q1, which suggests that the company is successfully scaling its core-neutral digital banking platform despite the inherent complexities of the regional financial institution market.
The consistent double-digit growth indicates that the company's value proposition remains relevant to RCFIs seeking modernization without core replacement. Investors should monitor whether this growth rate can be sustained as the company reaches higher penetration levels within its target tier-2 and tier-3 banking segments.
As reported in the income statement, Q2 Holdings has achieved a notable expansion in gross margins, climbing from 49.7% in 2024Q1 to 59.1% by 2026Q1, which implies improved efficiency in cloud infrastructure management and a favorable shift in the mix toward higher-margin software subscription revenue.
This margin expansion is a critical indicator of the company's ability to leverage its platform as it scales. The trend suggests that the company is successfully managing the variable costs associated with legacy system integrations, though further gains may be harder to capture as the platform matures.
Based on the quarterly figures, Q2 Holdings has demonstrated significant operating leverage, with operating income swinging from a $14.2M loss in 2024Q1 to a $28.1M profit in 2026Q1, indicating that revenue growth is now outpacing the expansion of core operating expenses like R&D and SG&A.
The company appears to have moved past the most intensive phase of its investment cycle, allowing for meaningful bottom-line contribution. This transition suggests that management's focus on GAAP profitability is yielding tangible results, though the sustainability of this leverage depends on continued discipline in overhead spending.
Data from recent filings reveals that Q2 Holdings continues to utilize significant stock-based compensation, with $20.3M recorded in 2026Q1, which warrants careful scrutiny as it represents a substantial portion of the company's operating income and may dilute the quality of reported GAAP earnings for shareholders.
While the company is achieving GAAP profitability, the reliance on equity-based incentives to attract specialized fintech talent remains a persistent feature of the cost structure. Investors should evaluate whether this compensation level is necessary for retention or if it masks the true economic cost of maintaining the platform's competitive edge.
Quick answers to the most common questions about buying QTWO stock.
For fiscal year 2025, Q2 Holdings, Inc. (QTWO) reported total revenue of $794.8M. This represents a 2845.7% increase compared to $27.0M in 2011.
Q2 Holdings, Inc. (QTWO) is profitable, generating $52.0M in net income for the fiscal year ending 2025 with a net profit margin of 6.5%.
Q2 Holdings, Inc. (QTWO) reported an operating income of $45.6M, resulting in an operating profit margin of 5.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Q2 Holdings, Inc. (QTWO) generated $429.6M in gross profit for the year, representing a gross profit margin of 54.0%. This demonstrates the company's core pricing power and production efficiency.