Q2 Holdings stock plummeted after earnings fell short of expectations but revenue exceeded expectations

LootboxPhobia · 2026-02-12T00:30:54+00:00

Q2 Holdings, Inc. announced that its Q4 earnings fell short of expectations, with the stock dropping 6.2%. Despite revenue exceeding expectations, earnings per share were $0.31, below analysts' forecast of $0.60. The company expects revenue to grow in 2026 and repaid debt and conducted stock buybacks in the fourth quarter.

LootboxPhobia

2026-02-12 00:30:54

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Investing.com – Q2 Holdings, Inc. (NYSE:QTWO) stock plummeted 6.2% in after-hours trading on Wednesday after the digital banking solutions provider announced fourth-quarter earnings that significantly missed analyst expectations, despite revenue surpassing forecasts.

The company reported adjusted fourth-quarter earnings of $0.31 per share, down $0.29 from the consensus estimate of $0.60. Revenue was $208.2 million, exceeding the consensus estimate of $204.75 million, representing a 14% year-over-year increase and a 3% rise from the third quarter of 2025.

“We ended 2025 with the second strongest order quarter in our history, continuing the momentum from Q3, reflecting our strong execution,” said Matt Flake, Chairman, President, and CEO of Q2. “This year has been a balanced mix of new customer acquisitions and expansion within existing clients. Our core product lines continue to see demand, and this has been a key year for AI-driven innovation.”

For the first quarter of 2026, Q2 Holdings expects revenue between $212.5 million and $216.5 million, above the consensus estimate of $209.5 million. The company projects full-year 2026 revenue of $871 million to $878 million, in line with the consensus estimate of $873.3 million.

The company reported its annualized recurring revenue (ARR) from subscriptions increased to $780.1 million, up 14% year-over-year, while its backlog grew to approximately $2.7 billion, up 7% sequentially and 21% year-over-year.

Q2 Holdings also announced that by the end of the fourth quarter, it had repaid $191 million of convertible debt and repurchased approximately 69,000 shares at an average price of $72.52 per share.

“We delivered strong financial results at the end of the year, with revenue and adjusted EBITDA exceeding the high end of our guidance,” said Chief Financial Officer Jonathan Price. “In our final year of the three-year framework, we have significantly surpassed our initial expectations.”

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