Q2 Holdings, Inc. (NYSE: QTWO) announced its financial results for the third quarter ended September 30, 2026, alongside a leadership change. The company reported GAAP revenues of $225.8 million for the quarter, representing a 12 percent increase compared to the prior year and a 3 percent increase from the second quarter of 2026.
GAAP net income for the quarter was $33.2 million, an increase from $15.0 million in the prior-year period and $29.9 million in the previous quarter. The company also reported a GAAP gross margin of 59.7 percent, up from 54.0 percent in the prior year and 59.2 percent in the second quarter. Non-GAAP gross margin was reported at 62.6 percent, and adjusted EBITDA totaled $67.8 million, with a margin of 30 percent.
In the third quarter, Q2 signed seven Enterprise and Tier 1 contracts, including a net new agreement with a Tier 1 credit union for commercial digital banking solutions and an expansion agreement with an Enterprise bank to add risk and fraud solutions. Subscription Annualized Recurring Revenue increased to $846.0 million, up 13.5 percent year-over-year, and Remaining Performance Obligations (backlog) increased by $248 million year-over-year to approximately $2.8 billion.
Q2 generated $55.0 million of free cash flow during the quarter and repurchased $38.8 million of its common stock at an average price of approximately $61.27 per share. As of September 30, 2026, the company had approximately $336.1 million remaining under its share repurchase authorization.
Concurrent with the earnings release, the company announced that its Board of Directors has appointed Jonathan Price as Co-Chief Executive Officer, effective October 29, 2026. Mr. Price will serve alongside Matt Flake, who remains President and Chairman of the Board, and will also join the Board of Directors. Mr. Price will continue to serve as Chief Financial Officer while the company searches for his successor.
Q2 provided updated financial guidance for the full year 2026 and the fourth quarter of 2026. For the fourth quarter, the company expects total revenue between $226.0 million and $230.0 million, representing year-over-year growth of 9 to 10 percent, and adjusted EBITDA between $62.4 million and $65.4 million. For the full year 2026, the company expects total revenue of $888.0 million to $892.0 million, representing year-over-year growth of 12 percent, and adjusted EBITDA of $253.0 million to $256.0 million.
