QTWO Technology

Q2 Holdings, Inc.

$71.23+1.12%

Price as of close on Nov 3, 2026 · Financials updated Sep 30, 2026

Basics

Sector: Technology
Industry: Software - Application
Country: United States
Market cap: 4.4B USD
Enterprise value: 4.4B USD
Full-time employees: 2,548

Overall health

Strength: growing faster than most peersgrowing faster than peers
Drawback: its share price swings more than most peers’ (beta 1.33 vs a peer median of 0.87)bigger price swings (beta 1.33 vs peers 0.87)
Drawback: less short-term liquidity (current ratio 0.94 vs a peer median of 1.83)less liquidity (current ratio 0.94 vs peers 1.83)
About average: valuation and risk (debt, liquidity and share-price swings)valuation and risk

Ranks #439 of 1,612 technology companies (top 28%)

See how it ranks against its peers

Worth knowing

Stock pay outran buybacks. Stock-based pay expense $255M vs $5M spent repurchasing shares over the 3 fiscal years to 2025.
Over three fiscal years Q2 recorded $255M of stock-based pay expense and spent $5M repurchasing shares (repurchases can include shares withheld to cover employees' taxes). Repurchases were smaller than the stock pay, so they did little to offset new employee shares.Over three fiscal years Q2 recorded $255M of stock-based pay expense and spent $5M repurchasing shares. Repurchases were smaller than the stock pay, so they did little to offset new employee shares.
Stock-based pay is a large cost. Stock pay was 11% of revenue in 2025.
Q2 paid employees $87M in stock in 2025, 11% of its $795M revenue. It doesn't use cash, so it flatters cash flow, but it is a real cost to shareholders through dilution.
Operating margin at a 6-year high. 5.0% in 2025, the best of the last 6 years.
Q2 kept 5.0% of revenue as operating profit in 2025, its highest in the 6 years of filings we have.
Cash flow well above reported profit. Free cash flow is 2.3× reported profit.
Free cash flow is 2.3× reported profit. Large non-cash charges, such as depreciation, amortization or stock-based pay, reduce reported profit without using cash.

StockQuotient Score

62/ 100▼ 1 since Oct 27 close

Oct 5 65 → Nov 4 62 (-3)

Valuation

Is the price right?

44/100

Moderate▼ 3 since Oct 27 close

3/3 inputs reported · High confidence

Since last quarter: No major changeValuation also moves with the share price every day.

Why it changed since the Oct 27, 2026 close: Score 47 → 44

Share price +4.6%-1
Peer companies moved-2

Each step re-scores the company against its peers as they were on Oct 28, 2026; the parts add up to the change. Price effects on EBITDA yield are approximate.

Why

Mixed versus peers:

▲ FCF yield
▼ EBITDA yield

Compare with peers

Behind the score

Sector-normalized EBITDA, earnings, and free cash flow yields.

Earnings yield2.1%

SEC filings · 12 months to Jun 2026Reported value30% base weight · Z-score -0.08Sector median: 0.0225 · MAD: 0.0225

EBITDA yield2.6%

Yahoo Finance fallback · SEC enterprise value unavailable (debt or EBITDA not reported in standard form) · trailing 12 monthsReported value50% base weight · Z-score -0.45Sector median: 0.0423 · MAD: 0.0361

Free cash flow yield4.8%

SEC filings · 12 months to Jun 2026 · operating cash flow − capital spendingReported value20% base weight · Z-score 0.75Sector median: 0.0274 · MAD: 0.0274

Other data (not scored)

Book yield14.5%

SEC filings · latest balance sheetReported valueInformational · 0% composite weightSector median: 0.3292 · MAD: 0.1754

Growth

Is it growing?

96/100

Strong

3/3 inputs reported · High confidence

Since last quarter: ▲ Stronger

12-month revenue up 3.0%

Why

Stronger than most peers on:

▲ EPS growth
▲ 3-yr revenue
▲ Revenue growth

Compare with peers

Behind the score

Revenue and earnings-per-share growth over one year, and revenue growth over three years.

Earnings per share growth1772.1%

SEC filings · 12 months to Jun 2026Outlier capped at sector 5th/95th percentile33% base weight · Z-score 9.19Sector median: 0.1108 · MAD: 0.3050

3-year revenue growth12.2%

SEC filings · 3 years to Jun 2026Reported value33% base weight · Z-score 0.93Sector median: 0.0483 · MAD: 0.0793

Revenue growth13.9%

SEC filings · 12 months to Jun 2026Reported value33% base weight · Z-score 0.53Sector median: 0.0853 · MAD: 0.1017

Profitability

Does it earn well?

71/100

Moderate▼ 1 since Oct 27 close

3/3 inputs reported · High confidence

Since last quarter: ▲ Stronger

Operating margin rose 2.1 points to 10.0%

Why it changed since the Oct 27, 2026 close: Score 72 → 71

Peer companies moved-1

Each step re-scores the company against its peers as they were on Oct 28, 2026; the parts add up to the change. Price effects on EBITDA yield are approximate.

Why

Stronger than most peers on:

▲ ROA
▲ ROIC
▲ Operating margin

Compare with peers

Behind the score

Return on invested capital, operating margin, and return on assets.

Operating margin10.0%

SEC filings · 12 months to Jun 2026Reported value33% base weight · Z-score 0.52Sector median: 0.0631 · MAD: 0.0710

Return on assets9.5%

SEC filings · 12 months to Jun 2026Reported value33% base weight · Z-score 1.81Sector median: 0.0293 · MAD: 0.0362

Return on invested capital12.3%

SEC filings · 12 months to Jun 2026Reported value33% base weight · Z-score 0.65Sector median: 0.0676 · MAD: 0.0857

Other data (not scored)

Gross margin57.0%

SEC filings · 12 months to Jun 2026Reported valueInformational · 0% composite weightSector median: 0.3343 · MAD: 0.1632

Return on equity14.3%

SEC filings · 12 months to Jun 2026Reported valueInformational · 0% composite weightSector median: 0.0753 · MAD: 0.0889

Risk

Debt, liquidity, price swings

Moderate

Moderate relative risk

3/3 inputs reported · High confidence

Since last quarter: No major change

Why

Mixed versus peers:

▲ Debt / equity
▼ Current ratio
▼ Beta

Compare with peers

Behind the score

Relative to sector peers: 0 = lower relative risk · 1 = moderate · 2 = higher. Based on leverage, beta and liquidity.

Beta1.33

Yahoo Finance · 5-year monthly beta vs the marketReported value33% base weight · Z-score -1.25Sector median: 0.8710 · MAD: 0.3700

Current ratio0.94×

SEC filings · latest balance sheetReported value33% base weight · Z-score -1.29Sector median: 1.8295 · MAD: 0.6848

Debt / equity0.06×

Yahoo Finance fallback · no standard SEC debt tagReported value33% base weight · Z-score 0.82Sector median: 0.2495 · MAD: 0.2270

Valuation, growth and profitability scores: higher is better. Risk: 0 is lower, 2 is higher. Risk is a relative proxy, not a bankruptcy probability. Scores depend on available sector peers.

Questions investors ask about Q2

Is Q2 getting weaker?: Its latest SEC filing (Jul 29, 2026) got stronger: operating margin rose 2.1 points to 10.0%. Its overall score is 62/100, down 1 since Oct 28, 2026.
How is Q2 valued vs its peers?: Priced about in line with its peers. Valuation scores 44/100 against 1,711 technology peers. Free cash flow yield 4.8% vs a peer median of 2.7% (stronger than 63% of peers).Free cash flow yield 4.8% vs peers 2.7% (stronger than 63% of peers). EBITDA yield 2.6% vs a peer median of 4.2% (weaker than 64% of peers).EBITDA yield 2.6% vs peers 4.2% (weaker than 64% of peers).
Is Q2 growing?: Yes, faster than most of its peers. Growth scores 96/100 against 1,711 technology peers. Earnings per share growth 1772.1% vs a peer median of 11.1% (stronger than 96% of peers).Earnings per share growth 1772.1% vs peers 11.1% (stronger than 96% of peers).
How profitable is Q2?: More profitable than most of its peers. Profitability scores 71/100 against 1,711 technology peers. Return on assets 9.5% vs a peer median of 2.9% (stronger than 84% of peers).Return on assets 9.5% vs peers 2.9% (stronger than 84% of peers).
How risky is Q2?: Moderate risk relative to 1,711 technology peers, judged on debt, liquidity and share-price swings. Debt / equity 0.06× vs a peer median of 0.25× (stronger than 74% of peers).Debt / equity 0.06× vs peers 0.25× (stronger than 74% of peers). Current ratio 0.94× vs a peer median of 1.83× (weaker than 90% of peers).Current ratio 0.94× vs peers 1.83× (weaker than 90% of peers). A relative measure, not a bankruptcy probability.

Latest filing: what changed

Quarter ended Jun 30, 2026 · filed Jul 29, 2026 · compared with the quarter ended Mar 31, 2026

Got stronger

Operating margin rose 2.1 points to 10.0%

	Previous quarter	Latest quarter	Change
Revenue (12 months)	821.6M USD	846.2M USD	+3.0%
Net income (12 months)	73.9M USD	92.0M USD	+24.5%
Operating margin	8.0%	10.0%	+2.1 pts
Free cash flow (12 months)	201.6M USD	213.2M USD	+5.8%
Cash	342.3M USD	99.9M USD	−70.8%
Shares outstanding	62.6M	62.4M	−0.4%

From the company’s own SEC filings, as filed. Twelve-month figures roll forward one quarter at a time.

Industry valuation context

Industry: Software - Application · 81 companies

Valuations in Software - Application are near the bottom of their range since 2016.

6% of months since 2016 were valued lower than now.
8% of companies are in the most expensive fifth of their own price-to-sales history.
Over 24 months, company values −16% and earnings +31% (medians): earnings grew faster than prices.
Median price-to-sales is +85% vs the whole market, against a usual +235%.

2016Shaded: most expensive fifth of its range2026

Financials

Fiscal years from SEC annual filings · change vs the prior year

Key ratios	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025	Change
Gross margin	45.1%	45.3%	48.5%	50.9%	54.1%	▲ 3.2 pts
Operating margin	-15.6%	-18.5%	-13.8%	-6.1%	5.0%	▲ 11 pts
Net margin	-22.6%	-19.3%	-10.5%	-5.5%	6.5%	▲ 12 pts
Return on assets (ROA)	-8.1%	-8.1%	-5.4%	-3.0%	4.1%	▲ 7.1 pts
Return on equity (ROE)	-19.8%	-26.0%	-14.6%	-7.4%	7.9%	▲ 15 pts
Free cash flow margin	2.3%	4.5%	10.3%	18.5%	24.5%	▲ 6.0 pts
Current ratio	3.10×	2.77×	2.23×	1.40×	1.02×	▼ 27%
Interest coverage	—	—	-18.56×	-8.92×	8.10×	▲ 191%

QTWO price history

Price history is added with the daily price update and will appear after the next one.

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Bringing the fundamentals into focus…

Overall health

Strength: growing faster than most peersgrowing faster than peers

Drawback: its share price swings more than most peers’ (beta 1.33 vs a peer median of 0.87)bigger price swings (beta 1.33 vs peers 0.87)

Drawback: less short-term liquidity (current ratio 0.94 vs a peer median of 1.83)less liquidity (current ratio 0.94 vs peers 1.83)

About average: valuation and risk (debt, liquidity and share-price swings)valuation and risk

Ranks #439 of 1,612 technology companies (top 28%)

See how it ranks against its peers

Worth knowing

Stock pay outran buybacks. Stock-based pay expense $255M vs $5M spent repurchasing shares over the 3 fiscal years to 2025.

Over three fiscal years Q2 recorded $255M of stock-based pay expense and spent $5M repurchasing shares (repurchases can include shares withheld to cover employees' taxes). Repurchases were smaller than the stock pay, so they did little to offset new employee shares.Over three fiscal years Q2 recorded $255M of stock-based pay expense and spent $5M repurchasing shares. Repurchases were smaller than the stock pay, so they did little to offset new employee shares.

Stock-based pay is a large cost. Stock pay was 11% of revenue in 2025.

Q2 paid employees $87M in stock in 2025, 11% of its $795M revenue. It doesn't use cash, so it flatters cash flow, but it is a real cost to shareholders through dilution.

Operating margin at a 6-year high. 5.0% in 2025, the best of the last 6 years.

Q2 kept 5.0% of revenue as operating profit in 2025, its highest in the 6 years of filings we have.

Cash flow well above reported profit. Free cash flow is 2.3× reported profit.

Free cash flow is 2.3× reported profit. Large non-cash charges, such as depreciation, amortization or stock-based pay, reduce reported profit without using cash.

Questions investors ask about Q2

Is Q2 getting weaker?

Its latest SEC filing (Jul 29, 2026) got stronger: operating margin rose 2.1 points to 10.0%. Its overall score is 62/100, down 1 since Oct 28, 2026.

How is Q2 valued vs its peers?

Priced about in line with its peers. Valuation scores 44/100 against 1,711 technology peers. Free cash flow yield 4.8% vs a peer median of 2.7% (stronger than 63% of peers).Free cash flow yield 4.8% vs peers 2.7% (stronger than 63% of peers). EBITDA yield 2.6% vs a peer median of 4.2% (weaker than 64% of peers).EBITDA yield 2.6% vs peers 4.2% (weaker than 64% of peers).

Is Q2 growing?

Yes, faster than most of its peers. Growth scores 96/100 against 1,711 technology peers. Earnings per share growth 1772.1% vs a peer median of 11.1% (stronger than 96% of peers).Earnings per share growth 1772.1% vs peers 11.1% (stronger than 96% of peers).

How profitable is Q2?

More profitable than most of its peers. Profitability scores 71/100 against 1,711 technology peers. Return on assets 9.5% vs a peer median of 2.9% (stronger than 84% of peers).Return on assets 9.5% vs peers 2.9% (stronger than 84% of peers).

How risky is Q2?

Moderate risk relative to 1,711 technology peers, judged on debt, liquidity and share-price swings. Debt / equity 0.06× vs a peer median of 0.25× (stronger than 74% of peers).Debt / equity 0.06× vs peers 0.25× (stronger than 74% of peers). Current ratio 0.94× vs a peer median of 1.83× (weaker than 90% of peers).Current ratio 0.94× vs peers 1.83× (weaker than 90% of peers). A relative measure, not a bankruptcy probability.

Previous quarter

Latest quarter

Change

Revenue (12 months)

821.6M USD

846.2M USD

+3.0%

Net income (12 months)

73.9M USD

92.0M USD

+24.5%

Operating margin

8.0%

10.0%

+2.1 pts

Free cash flow (12 months)

201.6M USD

213.2M USD

+5.8%

Cash

342.3M USD

99.9M USD

−70.8%

Shares outstanding

62.6M

62.4M

−0.4%

Key ratios

FY 2021

FY 2022

FY 2023

FY 2024

FY 2025

Change

Gross margin

45.1%

45.3%

48.5%

50.9%

54.1%

▲ 3.2 pts

Operating margin

-15.6%

-18.5%

-13.8%

-6.1%

5.0%

▲ 11 pts

Net margin

-22.6%

-19.3%

-10.5%

-5.5%

6.5%

▲ 12 pts

Return on assets (ROA)

-8.1%

-5.4%

-3.0%

4.1%

▲ 7.1 pts

Return on equity (ROE)

-19.8%

-26.0%

-14.6%

-7.4%

7.9%

▲ 15 pts

Free cash flow margin

2.3%

4.5%

10.3%

18.5%

24.5%

▲ 6.0 pts

Current ratio

3.10×

2.77×

2.23×

1.40×

1.02×

▼ 27%

Interest coverage

—

-18.56×

-8.92×

8.10×

▲ 191%