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Interested in nCino Inc.? Here are five stocks we like better. Strong financial performance: nCino’s second-quarter revenue rose 8% year over year to $161 million, while subscription revenue increased 10% to $143.5 million. Non-GAAP operating income climbed 36% to $40.8 million and free cash flow surged 170% to $34 million. Growing platform and AI adoption: Platform pricing accounted for 48% of total annual contract value, up from 40% the prior quarter, and more than 230 customers had purchased AI Intelligence Units. Four major U.S. enterprise customers renewed at average annual contract value increases above 10%. Outlook raised despite mortgage weakness: nCino lifted its fiscal 2027 operating-income and free-cash-flow guidance, but reduced U.S. mortgage revenue forecasts as elevated rates continue to pressure independent mortgage banks. The company also repurchased $65 million of shares and authorized a new $100 million buyback program. Why Q2 Holdings Stock Could Be Your Next Big Buy nCino (NASDAQ:NCNO) reported second-quarter fiscal 2027 revenue growth and raised portions of its full-year outlook, as the company highlighted demand for its banking software platform and growing customer adoption of its AI capabilities. Total revenue for the quarter was $161 million, up 8% from a year earlier, while subscription revenue increased 10% to $143.5 million, Chief Financial Officer Greg Orenstein said. Subscription revenue excluding U.S. mortgage rose 12% year over year, including on a constant-currency basis. → Rocket Lab's Sell-Off Is Fading—Is It Finally Safe to Buy? nCino's path to profits: Niche fintech with strong prospects Non-GAAP operating income increased 36% year over year to $40.8 million, representing 25% of total revenue. Free cash flow rose 170% to $34 million. Professional services revenue declined 3% to $17.5 million, though professional services gross margin improved to 3% from negative 3% a year earlier as the company prioritized profitability over services revenue growth. Chief Executive Officer Sean Desmond said nCino continued to see customer interest in consolidating banking workflows—including lending, onboarding, account opening and portfolio monitoring—on its unified platform. The company is emphasizing AI-enabled functions through its Banking Advisor products and its platform-pricing model. → Travel + Leisure Goes Big—Is It Ready to Rally? During the quarter, nCino signed early multiyear renewals with four of its 20 largest U.S. enterprise customers by annual contract value, or ACV. The four customers represented more than $900 billion in assets and renewed with average ACV increases of more than 10%, according to Desmond. As of the end of the quarter, 12 of nCino’s top 20 U.S. enterprise customers by ACV had transitioned to the company’s platform-pricing model under multiyear contract extensions. About 48% of total ACV was on platform pricing, compared with 40% in the prior quarter. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects More than 230 customers had purchased AI Intelligence Units by quarter-end, Desmond said. The company has begun selling additional units to some customers that reached the limits of their initial bundles, though it does not expect that monetization to materially affect fiscal 2027 results. Management said its current priority is building long-term adoption rather than maximizing near-term subscription revenue from the units. Desmond pointed to Continuous Credit Monitoring, a Banking Advisor capability, as a potential medium-term driver of Intelligence Unit consumption. The feature can assess more than 40 credit and operational indicators daily, identify loans requiring attention and help create documentation for review. He said the product combines natural-language capabilities with nCino’s proprietary deterministic models and algorithms, which are intended to support traceable and auditable banking processes. One U.S. enterprise customer estimated that nCino’s “locate and file” capability could save 160,000 hours annually. Using an estimated $35 hourly loan officer compensation figure, Desmond said that would equate to more than $5.5 million in annual savings. The customer was still in a sandbox environment while working through security reviews, Orenstein said. nCino cited new international customer wins, including Hachijuni Nagano Bank in Japan for consumer lending and a growth-focused development finance institution in Germany for commercial lending. Non-U.S. revenue grew 9% to $36.4 million, while international subscription revenue rose 13% to $30.9 million. The company also described several expansion deals in the U.S. A regional bank with more than $15 billion in assets expanded from commercial lending and treasury management into consumer lending. A Seattle-based credit union added commercial and small-business lending as well as commercial account opening, while a Northeast community bank expanded into mortgage capabilities. Orenstein said nCino signed what it expects to be its largest deal of the fiscal year with an international customer early in the third quarter. The company plans to discuss that transaction in more detail on its next earnings call. U.S. mortgage subscription revenue was $20.6 million in the second quarter, down 1% year over year. Management said higher mortgage rates continue to pressure the independent mortgage bank, or IMB, market and contribute to industry consolidation. Desmond said nCino is pursuing market-share opportunities among banks, credit unions and IMBs, including an IMB customer that returned after leaving in August 2024 for a lower-cost competitor. The customer came back after experiencing reliability issues and a cumbersome borrower experience with the alternative product, he said. For the full year, nCino kept its aggregate churn expectation at about $25 million, but said the forecast now includes a somewhat higher mix of IMB churn and less churn elsewhere in the business. Desmond said mortgage represents about one-third of the expected annual churn. For the third quarter, nCino forecast total revenue of $161.25 million to $163.25 million and subscription revenue of $143.25 million to $145.25 million. At the midpoint, the guidance implies 7% total revenue growth and 8% subscription revenue growth. Excluding U.S. mortgage, third-quarter subscription revenue is expected to grow 11%. For fiscal 2027, the company now expects total revenue of $644 million to $647 million and subscription revenue of $573.5 million to $576.5 million. The midpoint represents 9% total revenue growth and 10% subscription revenue growth, with subscription growth excluding U.S. mortgage expected to be 12%. The company reduced its U.S. mortgage subscription revenue forecast to approximately $20 million for the third quarter and $18.5 million for the fourth quarter, reflecting expected IMB churn amid the higher-for-longer rate environment. It raised its full-year non-GAAP operating income outlook to $171 million to $174 million, from a prior range of $166 million to $171 million, and lifted free-cash-flow guidance to $137 million to $142 million. nCino also repurchased approximately 4.2 million shares during the second quarter for about $65 million, at an average price of $15.41 per share. The company completed a previously announced $100 million accelerated share repurchase program and received authorization from its board for a new $100 million repurchase program. nCino, Inc provides a cloud-based banking operating system designed to modernize and streamline processes for financial institutions. Built on a software-as-a-service (SaaS) model, the nCino Bank Operating System integrates key banking functions into a unified platform, enabling banks and credit unions to enhance efficiency, reduce risk and improve customer experiences. Founded in 2012 as a spinoff from Live Oak Bank, nCino launched its flagship offering to address the needs of commercial and retail lenders seeking to replace legacy systems. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "nCino Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Archer's post-earnings rally was driven by a dual catalyst: an all-stock acquisition of three Boeing units and a Q2 revenue beat of over 150%. Archer Aviation (ACHR) reported Q2 FY2026 after the close on August 10, and the stock rose 8.5% the following day. Only part of that traced to the quarter itself. What changed is that a company that has yet to certify its own aircraft agreed to buy a profitable drone maker with revenue across 35 countries, and it is paying with equity rather than cash. The deal covers three Boeing-owned businesses, Wisk Aero, Insitu, and SkyGrid, in an all-stock transaction management expects to close by the end of 2026, with Boeing taking a roughly 20% stake plus warrants. Insitu matters immediately: management says it is profitable today, with over $200 million in annual revenue across 35 countries. Archer's own revenue over the trailing twelve months is about $7 million. The stock followed the deal rather than the industry: the move came on August 11, the first trading day after the report, while peers JOBY fell 4.4% and EVEX was flat over the same span. Set against that, the reported quarter was small. Revenue was $5 million, more than triple the prior quarter, and management credits the increase to growing operations at Hawthorne Airport in L.A. The $0.25 loss per share matched consensus and was two cents narrower than a year earlier; revenue came in ahead of estimates. Midnight, the air taxi, still has to clear certification before it scales: management says Archer is in the fourth and final phase of FAA type certification, has flown more than 150 piloted test flights, and is targeting about 250 charging sites by 2030. Q2 adjusted EBITDA was a loss of $177 million against $1.6 billion of liquidity, and paying Boeing in shares leaves that liquidity intact, at the cost of roughly a fifth of the company. Preserving cash matters most when a balance sheet is still funding development rather than being funded by it, and defensible balance sheets are one of the things the Trefis High Quality Portfolio insists on in its holdings. How fast that liquidity goes out is what the spend guide addresses. For Q3 2026 management guided the adjusted EBITDA loss to $170 million to $200 million, the same range guided for Q2, spend that already carries the Midnight flight test program, the hybrid aircraft Archer is developing with Anduril and ZEE, its aviation foundation model. Once the acquisitions close, management says cash burn stays relatively flat from where it is today. That is the commitment from this report a shareholder can most directly check. The reason to own Archer has changed shape: it was a bet on certifying Midnight, and it is now also a bet that a certification company can run an acquired drone manufacturer on the same spending. Options price ACHR at an implied volatility of 80%, in the 65th percentile of its trailing year, so the market is not treating the outcome as settled either. A pop like this is the payoff for holding through the uncertainty, and it is also how sizeable positions quietly get bigger. A position that has grown large enough to matter is worth sizing deliberately rather than by accident. What a position that size would do to your net worth is exactly what the Trefis Wealth team computes, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.

Image source: The Motley Fool. Wednesday, July 29, 2026 at 5:00 p.m. ET CFO - Jonathan Price Chairman, President and CEO - Matthew Flake Investor Relations - Josh Yankovich Operator: Good afternoon. My name is Kevin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 Holdings Second Quarter 2026 Financial Results Conference Call. I will now hand the conference over to Josh Yankovich, Investor Relations. Sir, please begin. Josh Yankovich: Thank you, operator. Good afternoon, everyone, and thank you for joining us today. With me on the call are Matt Flake, our CEO; and Jonathan Price, our CFO. This call contains forward-looking statements that are subject to significant risks and uncertainties, including, among other things, with respect to our expectations for the future operating and financial performance of Q2 Holdings and for the financial services industry. Actual results may differ materially from those contemplated by these forward-looking statements, and we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included in our periodic reports filed with the SEC, copies of which may be found on the Investor Relations section of our website, including our quarterly report on Form 10-Q for the second quarter of 2026, and the press release distributed this afternoon and filed in our Form 8-K with the SEC regarding the financial results we will discuss today. Forward-looking statements that we make on this call are based on assumptions only as of the date discussed. Investors should not assume that these statements will remain operative at a later time, and we undertake no obligation to update any such forward-looking statements discussed in this call. Also, unless otherwise stated, all financial measures discussed on this call other than revenue will be on a non-GAAP basis. A discussion of why we use non-GAAP financial measures and a reconciliation of the non-GAAP measures to the most comparable GAAP measures is included in our press release, which is available on the Investor Relations section of our website and in our Form 8-K filed today with the SEC. We have also published additional materials related to today's results on our Investor Relations website. Let me now turn the call over to Matt. Matthew Flake: Thanks, Josh, and good afternoon, everyone. Thank you for joining us today. I'll start by sharing our second quarter results and highlights from across the business. I'll then hand the call over to Jonathan to discuss our financial results in more detail and provide our updated outlook for the remainder of the year. We delivered another strong quarter of execution with financial results that reflect the continued strength of our subscription model, healthy demand for our mission-critical solutions and the operating leverage we continue to build into the business. In the second quarter, we generated revenue of $219.8 million, representing 13% year-over-year growth. We also delivered adjusted EBITDA of $62.8 million or 28.6% of revenue and generated free cash flow of $51 million. Overall, we're pleased with the performance of the business through the first half of the year. We continue to see strong engagement from customers and prospects. We're executing well across our major product lines, and we believe our platform strategy is becoming even more relevant as financial institutions look to modernize their technology, protect their customers and begin to leverage Q2 to adopt AI in practical and responsible ways. On the sales front, we had another strong bookings quarter, highlighted by 8 total Tier 1 and enterprise wins across the portfolio. The quality and breadth of these wins were encouraging. We saw continued activity across digital banking, risk and fraud and relationship pricing. There were a few specific themes that played out in the quarter, which I'll highlight briefly. First, we've talked about our land and expand model as a key part of our strategy because of the synergy and breadth of our product portfolio today, we have multiple avenues to land a new customer and then expand their relationship with Q2 over time. In the second quarter, we signed a relationship pricing deal with a top 25 U.S. bank that provides a powerful demonstration of this dynamic. This customer first signed for our small business and commercial digital banking capabilities in 2023. Last year, they signed an expansion for our risk and fraud products to protect their commercial customers. And in the second quarter, after attending our client conference, they signed another significant expansion for our relationship pricing capabilities. So in just 3 years, this bank has signed for three of our major product lines, illustrating the significant expansion potential that exists, especially with these larger enterprise customers. We also view this particular deal as a strong example of the potential for synergy between commercial digital banking and the relationship pricing aspects of our solutions. Large sophisticated commercial banks are increasingly looking to price both sides of the commercial balance sheet in a more integrated way, helping them improve profitability across loans, deposits and fee-based products. And with our combined commercial capabilities, we believe we are uniquely equipped to help them compete for and retain commercial clients. Beyond relationship pricing, we continue to see M&A drive meaningful momentum for us in the quarter, which is the second theme I'll highlight. We've talked for years about banking sector M&A as an opportunity for Q2. Historically, that has often been because our customers have tended to be healthy growth-oriented institutions that are on the acquiring side of transactions. During the quarter, we had a meaningful Tier 1 win come from the opposite dynamic. In this case, a $2 billion asset size Q2 customer was acquired by a $9 billion bank. And the combined entity made the decision to adopt Q2 across the entire bank in an open competitive evaluation that included the acquirer's incumbent solution and several others. Wins like this are impactful because they demonstrate the competitive strength of our digital banking solutions. It also shows why we have tended to benefit from M&A amongst our customer base, whether our customer is the acquirer or the acquired institution. Q2 is often in a strong position when the combined entity evaluates the technology needed to support the next phase of growth post acquisition. The M&A-related win and the relationship pricing expansion are just two highlights from another strong quarter of bookings performance. We continue to benefit from a healthy balance of new customer activity and expansion with existing customers, and we're excited about the momentum we're carrying into the second half. Another major highlight from the quarter was CONNECT 26, our annual customer conference. This was our biggest conference yet with record customer and prospect attendance. As always, the conference gave us a valuable opportunity to spend time with customers, prospects and partners, hear directly about their priorities and share the next phase of our product strategy. The customer engagement at CONNECT was very strong, and one of the clearest themes we saw was the demand for practical AI. Not AI as a broad technology concept, but AI applied to real workflows and use cases that can help financial institutions operate more efficiently, differentiate their digital experiences and better protect their customers. As we discussed last quarter, we believe Q2 has several key differentiators in the current wave of AI innovation, data, distribution, incumbency and trust. Our platform sits in the flow of digital banking interactions, giving us deep banking specific context that is difficult to replicate. We have an established customer and partner network that can consume AI capabilities as we deliver them. And importantly, our customers trust us to help them apply AI in a secure, compliant and operationally sound way. At CONNECT, the customer conversations reinforce that our near-term AI product focus is aligned with the areas where financial institutions are actively looking for value. Improving efficiency for bankers, helping customers and partners build and personalize digital experiences faster and strengthening fraud protection. We showcased products tied directly to those priorities. First, we formally announced Q2 Assistant from the keynote stage. Q2 Assistant is designed to embed AI directly into the digital banking experience, so bankers can use natural language to access information navigate workflows and ultimately operate more efficiently within the platform. The reception from customers was very strong. In fact, Q2 Assistant was the most frequently demoed item in our exhibit hall, which tells us, customers are not just interested in AI in the abstract. They are looking for practical trusted use cases that can create value inside their institutions. Second, we demoed Q2 Code from the keynote stage. Q2 Code is our AI-assisted development capability designed to help customers, partners and Q2 teams build on our platform faster using natural language and the power of our SDK. The strategic point is that Q2 Code extends one of our core differentiators, the ability to tailor the platform via Q2 Innovation Studio. Customers already use Innovation Studio to extend their digital banking experience, integrate partner capabilities and tailor the platform to their needs. Q2 Code is intended to make that process faster and accessible to more builders. They can add custom pages, change the look and feel of their experience, and build entirely new functionality through prompts. In our demos, the customer reaction was clear. They see the potential to move from idea to execution faster and ultimately deeply personalize and differentiate their digital experience with less friction in the build process. We are still early in this journey, but these are not just conceptual demos. Across our AI product set, these capabilities are either in production, moving through early adopter or being implemented with customers today, and we're encouraged that customers are already moving from interest to action signing on as early adopters in the week since CONNECT. The third major AI product we covered was in the fraud arena, which is one of the areas where we see some of the clearest near-term applications for AI. As we've discussed in recent quarters, the cost and complexity of fraud continues to increase across financial institutions. Today, fraud has become a continuous enterprise-wide challenge that spans retail, small business and commercial banking, and it is driving increasing levels of attention and investment from our customers. We believe this is a large and growing opportunity for us. As fraud grows more complex and the stakes for financial institutions rise, our view is that financial institutions will look for a platform that sits at the center of the digital banking experience with the data, the distribution and the trust to act in real time. That is precisely where Q2 sits, and it is why we believe fraud is one of the most compelling growth opportunities in our portfolio. At CONNECT, we shared our latest fraud strategy and product developments, including our work around account takeover. I want to highlight this area because it demonstrates why we believe Q2 is well positioned to help financial institutions address the growing fraud challenge. Because our digital banking platform sits inside the flow of activity, we have the visibility in the behavioral signals and user interactions as they happen. Our new account takeover product uses AI to continuously monitor those signals and interactions identify signs of compromise and intervene in real time. The customer response was extremely positive. Today, we already have had double-digit customers sign up for the new account takeover product. And we're encouraged by the traction this product is already getting with customers. More broadly, we believe fraud will remain one of the most important investment priorities for financial institutions. The threat environment and vendor landscape are evolving quickly, and customers are looking for trusted partners who can help them simplify their technology while improving protection. We believe Q2 can play that role because of the breadth of our broad solutions, our innovation studio ecosystem and the central position our platform holds in the digital banking experience. Stepping back from the individual product areas, the overall customer sentiment at CONNECT was very positive. There was clear excitement around AI, and we saw customers move from asking whether AI matters to asking how they can adopt it responsibly and where it can create the most value. That is an important shift. At the same time, our customers were very clear that their traditional priorities remain front and center. They need to grow and retain deposits. They need to protect against fraud, they need to drive engagement, they need to operate more efficiently and they need technology partners who can help them do all of that in a secure, scalable and compliant way. That is why we feel good about our position, the areas where customers are investing, digital banking, fraud, commercial growth, platform extensibility and practical AI are all areas where Q2 has built meaningful capability and differentiation. When you combine our strong second quarter execution with the quality of our bookings activity and the customer engagement we saw at CONNECT, we feel good about our momentum as we enter the second half of the year. Our pipeline remains healthy, including opportunities in larger enterprise and Tier 1 accounts, and we continue to see solid demand across digital banking relationship pricing and risk in fraud. We're pleased with where we stand against our financial expectations for the year, and Jonathan will discuss our annual guidance for 2026 in more detail. With that, I'll hand the call over to Jonathan. Jonathan Price: Thanks, Matt. We are pleased to report another quarter of strong financial performance with second quarter results above the high end of our guidance on both revenue and adjusted EBITDA. We also delivered record results across gross margin and adjusted EBITDA, and we retired our last tranche of convertible notes in June. Let me start by discussing our financial results in more detail, and I'll finish with our updated third quarter and full year 2026 guidance. Total revenue for the second quarter was $219.8 million, an increase of 13% year-over-year and 2% sequentially. Our revenue growth was driven by subscription-based revenues, which grew 15% year-over-year and 2% sequentially and ended the quarter at 83% of total revenue. The year-over-year in sequential revenue growth was primarily driven by a combination of new customer go-lives and expansion with existing customers. Total non-subscription revenues were roughly flat year-over-year as growth in transactional revenue was largely offset by ongoing pressure in more discretionary professional services offerings. Consistent with our outlook at the beginning of the year, we continue to expect ongoing pressure in our discretionary services revenue, and this is contemplated in the updated guidance I will walk through shortly. Total annualized recurring revenue or total ARR grew to $971 million, up 13% year-over-year from $861 million at the end of the second quarter of 2025 and up 3% sequentially from $945 million at the end of the first quarter. Our subscription ARR grew to $826 million, up 15% from $716 million in the prior year period, with growth benefiting in part from a favorable comparison to the second quarter of 2025. Our year-over-year subscription ARR growth was largely driven by bookings from new customer wins as well as expansion with existing customers. Our total ARR growth remains below subscription ARR growth, driven by the trends we previously discussed related to non-subscription-based revenue. Our ending backlog of $2.8 billion increased by $22 million sequentially or 1% and increased $404 million year-over-year, representing 17% growth. The year-over-year and sequential increases were driven by booking success across new expansion and renewal activity. Non-GAAP gross margin was 62.3% for the second quarter, up approximately 480 basis points from 57.5% in the prior year period and up approximately 20 basis points from 62.1% in the prior quarter. The year-over-year improvement continues to reflect the completion of our cloud migration earlier this year. In addition, the year-over-year and sequential improvement in gross margin was driven by the continued shift in our revenue mix towards higher-margin subscription revenue. Total non-GAAP operating expenses for the second quarter were $81.7 million or 37.2% of revenue compared to $74.5 million or 38.2% of revenue in the second quarter of 2025 and $81.7 million or 37.7% of revenue in the prior quarter. The year-over-year increase in operating expenses was driven primarily by higher R&D personnel costs to support our continued product and AI investment. Sequentially, total operating expenses were essentially flat as higher sales and marketing costs from our annual client conference were offset by lower payroll taxes associated with equity vesting and bonus payments relative to the first quarter. Total adjusted EBITDA was a record $62.8 million in the second quarter, up 37% from $45.8 million in the prior year period and up 5% from $60 million in the prior quarter. Adjusted EBITDA margin was 28.6%, expanding approximately 510 basis points from 23.5% in the prior year quarter and up approximately 80 basis points from 27.7% compared to the first quarter of 2026. The year-over-year and sequential improvement was driven by strong revenue growth and gross margin expansion, partially offset by higher operating expenses. We ended the quarter with cash, cash equivalents and investments of $106 million, down from $379 million at the end of the prior quarter. The decline in cash was driven by two significant uses of capital in the quarter. The repayment of our 2026 convertible notes at maturity in the amount of $304 million and $23 million in share repurchases that occurred during the quarter. We generated cash flow from operations of $61 million in the second quarter, driven by profitability growth and solid working capital management and delivered $51 million of free cash flow. With the retirement of our convertible notes, we ended the quarter debt-free. Combined with our continued strong free cash flow generation, we believe this gives us substantial balance sheet capacity and flexibility in how we allocate capital going forward. I also want to provide an update on our share repurchase program. As of the end of the second quarter, we had repurchased approximately $125 million of our stock under our existing $150 million authorization announced in November 2025, with approximately $25 million remaining under the program. Today, I am pleased to announce that our Board of Directors has approved up to an additional $350 million of share repurchases, which brings our total available repurchase capacity to approximately $375 million. This authorization reflects our confidence in the long-term value of our business and our commitment to allocating capital to deliver shareholder value. We remain focused on maintaining a healthy balance sheet and preserving flexibility to support organic investment, inorganic opportunities as they arise and a patient and disciplined approach to share repurchases. Let me finish by sharing our third quarter and updated full year 2026 guidance. We forecast third quarter revenue in the range of $218.5 million to $222.5 million and full year 2026 revenue in the range of $881 million to $886 million, representing year-over-year growth of approximately 11%. We are also raising our subscription revenue growth expectation for full year 2026 to approximately 14.5%, up from our previous expectation of 14%, reflecting the strength of our year-to-date bookings and first half subscription revenue performance. We forecast third quarter adjusted EBITDA in the range of $58.5 million to $61.5 million and full year 2026 adjusted EBITDA in the range of $244 million to $248 million, representing approximately 28% of revenue. In summary, we delivered another record quarter of revenue and adjusted EBITDA, with both finishing above the high end of our guidance. This performance, coupled with our outlook for the remainder of the year, has given us the confidence to raise our full year guidance on both revenue and adjusted EBITDA for 2026. We intend to continue to execute on our profitable growth strategy by balancing investments to sustain durable subscription revenue growth and drive operating leverage over time, while prioritizing effective and opportunistic capital allocation from a position of financial strength. We believe that our results to date illustrate our progress and potential as we continue to evolve our business and drive shareholder value. With that, I'll turn the call back over to Matt for his closing remarks. Matthew Flake: Thanks, Jonathan. To wrap up, we're pleased with our second quarter results and the momentum we've built through the first half of the year. We delivered strong financial performance, continue to execute across our major product lines and saw healthy demand from both new and existing customers. We believe our bookings performance in the quarter, including 8 total Tier 1 enterprise wins, reinforces the value of our platform and the breadth of opportunity we have across digital banking, relationship pricing and fraud. CONNECT 26 also gave us a clear view into what our customers are prioritizing. They are focused on growing and retaining deposits, protecting their customers from fraud, operating more efficiently and investing in AI in practical, secure and compliant ways. Those priorities align directly with the areas where we have and continue to build meaningful capabilities and differentiation. As we enter the second half of the year, our pipeline remains healthy, customer engagement remains strong, and we feel good about our ability to continue executing against our strategy. With that, operator, we're ready to open the call for questions. Operator: And your first question comes from the line of Alex Sklar with Raymond James. Alexander Sklar: Matt, maybe first one for you. As you bring more agentic solutions to market, particularly on the fraud side, and you talked about your core digital banking customers seeing the road map with areas like Q2 Code and Assistant, can you talk about how that's catalyzed any change in those core digital banking cross-sell opportunities between commercial and consumer or just win rates broadly? Matthew Flake: Yes. Thanks, Alex. As I talked about it, when we talked to the customers at CONNECT, what was interesting was how they're leaning on us and looking to us to provide AI solutions. And so as the trusted partner of theirs, it is something that is creating opportunities. We talked about the lines that formed around our Code, Assistant and fraud product for AI, which Assistant actually had the most attendance at the booth to see it. So what's happening is it drives confidence in our ability to deliver the technology, which helps with renewals, helps with extensions, helps with cross-selling other products. And then on top of that, these products are hitting right where our customers want it. They want to protect deposits. They want to make their bankers more productive and then ultimately personalize these experiences for different initiatives that they have for whether it's commercial or retail customers. So not ready to roll out the financial gain from these products, but the energy and the excitement around it is going to add a lot to cross-selling with existing customers. And I think it's also going to help us win a lot of net new deals because there's not a lot of vendors in the space that are bringing real AI solutions that solve those problems I talked about to the table. So it's really exciting, and it's exciting to see the folks that are working on these products be rewarded with so much interest and engagement and to have these products in early adopter phase is exciting. Alexander Sklar: All right. Great, Matt. Well, that's more to look out for there. Jonathan, maybe a follow-up for you. You completed the cloud migration earlier this year. I know you've talked about kind of a multiyear optimization opportunity, but now with kind of 6 months under your belt. Maybe just update us on what you see as far as the subscription gross margin opportunity over the next couple of years? Jonathan Price: Yes. Thanks, Alex. Yes, look, I mean, we're continuing to operate in this new environment, and we're pleased with the progress we've made to date and learning and understanding how to operate. I won't say optimal yet, but certainly more effectively than at the beginning. And when I think about the road map for subscription gross margins obviously, from a total revenue perspective, we continue to expect the mix to increase towards subscription. So from a total gross margin perspective, that's definitely going to have an upward pressure on it in terms of the next few years. But then there are so many other initiatives in place, not just cloud optimization, but as we think about the future of AI and we think about efficiencies around the organization to continue to work on achieving our long-term gross margin goal that we put out there at the beginning of this year. So we feel good about the direction we're going. Obviously, this year was the big step function that we talked about leading into 2026. And so now we just got to keep executing against these other initiatives. But so far, so good in terms of how we're operating post cloud migration. Operator: And your next question comes from the line of Andrew Schmidt with KeyBanc. Andrew Schmidt: Good results. I wanted to just ask a question on the environment. A big question we had heading into earnings was just on sort of budget shifts and priority distraction and things like that. Obviously, look, it looks like you guys demand, if anything, is strengthening. So it doesn't seem like you've seen that. But maybe talk a little bit about prioritization when it comes to spend. And whether there have been any budget shifts that you're picking up or sort of distractions when it comes to sort of AI implementation, things like that. Matthew Flake: Yes, Andrew. I mean, the AI stuff is interesting to talk about with the prospective -- the prospects that are out there and the customers. But as I said in the script, at the conference, they want more commercial functionality, they want -- it could be bulk wires, it could be ERP integration. It could be in broader entitlement engine. So there's -- that's what's driving their business. Now the commercial customers, getting those deposits, the fees they can generate off of those, and that's driving a lot of the demand for us. Also, fraud is clearly a hot topic for them, and it's prevalent everywhere, whether it's in person, social fraud that's occurring when they're using people to manipulate it or actually transactions where somebody does account takeover. So those are big topics. Clearly, relationship pricing, pricing these relationships is more complicated when rates are where they are and the different dynamics that are out there, relationship pricing was the bell of the ball this quarter. And then innovation studio being able to bring a lot of the new innovation that's coming from start-ups that have features or products are a big part of this. So there's just the technology spend, it feels like it's going from leaving the back office general ledger kind of run the bank stuff to change the bank, and that's -- we're at the center of that, and that's what the opportunity has been for us, and that's why we continue to see this demand environment that we've seen and we continue to do well in it. Andrew Schmidt: That makes sense. That's very encouraging. Appreciate that. The other encouraging thing that I picked up was just the sort of the pent-up demand around some of the AI products, particularly Q2 Assist and et cetera. Maybe just help us EA timing, time to revenue, those sorts of things. Obviously, look, you're right. I mean, the core solutions are what's key, but obviously, these are important to sort of potential 2027 and 2028 beyond revenue contribution. So maybe just anything on sort of GA time to revenue and then pipeline and AI SKUs more broadly would be great. Matthew Flake: All right. Well, so on the EA side, I think we'll be in general availability for those products in the fourth quarter. And the number and all that -- the revenue is going to come through, we would like to get another quarter before -- quarter or 2 before we start sharing how that's going to flow through the P&L. But as we talked about, we have double-digit people in EAs right now for the fraud product and single digits on Code and Assistant. So that number should be growing. We're going to be patient. You got to get it right early and then you can have -- it will proliferate throughout the rest of the customers. But right now, there's lines forming. We've just got to get -- make sure we get it right and get the products up and doing what they say they're going to do. Jonathan Price: And Andrew, on the time to revenue question, it's still early, we're experimenting in EA. And the good news of having double-digit customers already on the fraud side is we can start to see what delivery will look like at scale and make sure that our time to revenue assumptions make sense as you think about scaling this product and the others over the course of time. So what I can say for certain now is the delivery time line and the conversion to revenue will be materially faster than, let's say, a digital banking implementation or a relationship pricing implementation more akin to some of our cross products, if not faster. But it's too early for us to lock in on an exact time to revenue guidance for you all here, but we hope to have a lot of clarity on that as we get through the rest of the year. Operator: And your next question comes from the line of Ella Smith with JPMorgan. Eleanor Smith: The second quarter tends to be a seasonally softer quarter for net new subscription ARR yet this print looks like one of your stronger second quarters in recent history. Can you help us understand how much of the recent broad tech and relationship pricing wins already flowing through into ARR this quarter versus how many quarters away we are before those larger deals begin to show up in a more meaningful way? Jonathan Price: Yes. Thanks, Ella. So a couple of things I'll point out on this. I mentioned this in the script, but strong first half on the subs ARR across the portfolio. But in particular, the second quarter did benefit from a favorable comp. And so it's worth noting that if you back out some of the dynamics from Q2 of 2025, it's very similar to what Q1 would have looked like in terms of subs ARR growth from a year-over-year perspective. So Q1 and Q2, even though you saw some acceleration in Q2, and we're pleased about that. There was a benefit there given what Q2 of 2025 included last year. When it comes to -- you're right, certainly, this quarter, we had strong success when it comes to the relationship pricing side of the business and some large bookings there. But I wouldn't necessarily call out those deals as being drivers any more so than all the wins and success we're having on the fraud side, on the digital banking side, obviously. And then a lot of the cross activity continues to be strong, including with these new products. So we continue to feel good about the pipeline and the opportunity set going forward. And again, I would look to the subs ARR, if you look at sort of where subs ARR year-over-year growth rates were in the middle of last year and then you think about our guide for the rest of this year, kind of tells you how we're looking at the second half when it comes to sub revenue growth. And then our job is to go and execute on bookings here the rest of the year and set ourselves up for a strong 2027. Eleanor Smith: Very clear. And for a follow-up, digital banking implementations have historically been lengthy and complex. Do you see a realistic path to using AI to meaningfully compress implementation time lines, taking weeks or even months off the process over the next few years? Or do you view the nature of the work as largely outside of the scope of what AI can address? Matthew Flake: Yes, I would say that what we've seen, and we've talked about this before is that the customer sign up for an implementation that's either 9 or 12 months, depending on the size of the financial institution, could be 6. And that's the time line they have for that project. What we're trying to do first is to make our teams more efficient. So if they carry three projects at a time, they can carry 4 or 5. And then ultimately, some of that work should translate to making it easier for the financial institution to implement it. It's still early. We're widely using AI within our delivery teams to make them more efficient. We're seeing some gains, but it's going to take some more time around that. But I think, ultimately, what we want to do is make the implementation more efficient for us, which should translate to making it easier for them in the long run and provide them with tools as well to make it easier for them as well. But that's going to take some time, but those are things that we are hard at work on. Operator: Your next question comes from Terry Tillman with Truist. Terrell Tillman: Yes. Can you hear me okay? Matthew Flake: Loud and clear. Terrell Tillman: Wonderful. Hey Matt, Jonathan and Josh, thanks for taking my question and follow-up as well. Matt, I think the quote was bell of the ball for relationship pricing. You did mention it a bunch, but you did also talk about risk and fraud a bunch to even in the press release. I'm just curious, and I get a lot of questions on this. I mean it's a very topical area. Anything more you can share in terms of -- or peel back the onion in terms of is the risk and fraud business something that's going to well outgrow your subscription overall revenue growth for some time. I mean just kind of -- where do you think you are in terms of like innings in terms of monetizing the set of products there within your installed base? And then I had a follow-up. Jonathan Price: Yes, Terry, maybe I'll take that one. I mean, certainly, when you take the fraud portfolio overall, it is growing at a premium to the total of the business. And we think there's an opportunity for that to be true for years to come, especially when you think about the new fraud AI products that we just talked about at length with UAM. Obviously, early days there, but I feel really good about that opportunity and the durability of it and the runway ahead. So from a fraud perspective, definitely think there's an accretive growth story there. Matthew Flake: Also, Terry, I mean the fraudsters are unfortunately innovating as well. So this has got a long tail to it. We've got to continue to compete with the weapon and bring a shield and then they bring a new weapon and we've got to develop a new shield and it's kind of never-ending. So we're -- that's unfortunate, but that is what it is. Terrell Tillman: Understood. Good point on that. And I guess the follow-up, Matt, you actually had -- I think it was in your prepared remarks, the synergies between commercial banking and relationship pricing. I know there is a lot more to relationship pricing than just like the loan books and just pricing on loans. You did call that out. Are the synergies going to help just drive more relationship pricing and up-selling there? Or does it actually go the other way sometimes now with these synergies, and it's driving even more commercial banking transactions or up-selling? Matthew Flake: Yes, it's a good question. I would -- I don't have all the data in front of me, but I would probably say that we're having more success selling relationship pricing to an existing commercial customer. But I think they're beginning to see some opportunities because we're developing a deeper relationship with these customers on both sides, and they begin to trust us, understand the quality work that we do, that we're a client-first company. And so those are creating more opportunities for us as financial institutions look to consolidate the number of vendors that they work with and the breadth of our product suite is something that our success -- our customer success team does a fantastic job of going out and making sure in strategic conversations with them that they understand all that we offer. So right now, I'd say it's more relationship pricing being sold to our commercial customers. But -- we'd like to see more of those relationship pricing customers buy commercial. Now keep in mind, those are some of the -- I think we have 9 of the 14 largest banks in North America. So those will take some time, but we're working those angles as well. Operator: Your next question comes from the line of Parker Lane with Stifel. J. Lane: Maybe sticking with risk and fraud. Obviously, the opportunity is huge here, and it's increasingly a big priority for your end markets. I was just wondering if you can comment on not just the opportunity growing, but your own competitiveness in this market. If you compare win rates today to maybe a couple of years ago, those meaningfully improved as well? And if so, can you talk to some of the advantages of working with Q2 for the full suite, including risk and fraud versus multiple vendors there? Matthew Flake: Yes, Parker, I don't have the win rates here, but I would think they would be up year-over-year for the last couple of years just because of the innovation and the progress we've made there. The real value prop is when you have a single platform for retail, small business and corporate banking, you have all the data and then you have -- it's all in one place, and you can use that data to identify behaviors of people that -- how they act, how they react when they log in, who they pay, when they pay, how often they pay, the Fed district they pay. You can begin to use that data to your advantage to notice behaviors that fall outside of that. So for us, it's -- the advantage is with a single platform, we're able to look at all that data comprehensively and provide solutions that stop the fraud based on not just did they enter the login ID and password, but do their behaviors match how they normally behave as opposed to fraudster. So it's a huge advantage for us. And I think it's why you see us differentiating ourselves in the sales organization and the success organization lean on their front foot when we're selling fraud products because we're extremely confident in our capabilities. J. Lane: I appreciate that, Matt. And then Jonathan, one for you. Looking at the subscription revenue outlook, I think it ticked up 50 bps, '27 unchanged, seems like renewal cross-sell going very well. Maybe you could provide some color on what you're seeing from a net new perspective and how your confidence has built and the outlook for that piece of the business for the balance of '26 and in '27? Jonathan Price: Yes. I mean, obviously, pleased with the execution year-to-date. And as we continue to look in the back half, the opportunity on net new -- independent of what looks great in terms of the opportunity, obviously, still on cross and renewals is very large and skews more to the Tier 1 and enterprise space like similar to the mix we saw last year. And so obviously, we got to go execute and have a big second half when it comes to those larger opportunities. But the net new in front of us is broad-based. And it's, like I said, mixed heavily towards Tier 1 and enterprise, especially in the fourth quarter. So I feel good that we can continue if we execute to see that same dynamic on the net new side. And then you're right, especially as we get into 2027, we're going to have a lot of renewal and cross-sell opportunity, especially when you just think about these new products getting out of EA and into GA. Especially by the beginning of 2027, we're going to be very focused on widely distributing these products and making sure we've got the value capture dynamics right and that we can deliver a value prop that allows for these products to be a meaningful contributor. So a big part of the story as we enter 2027 because that can be a huge contributor on the cross and expansion side. Operator: And your next question comes from Matt VanVliet with Cantor Fitzgerald. Matthew VanVliet: I guess following on a couple of these others. But as you look at the cross-sell pipeline ahead of you and Matt, you mentioned customer engagement continues to improve. I guess if you had to stack rank where the opportunities are going ahead between expanding digital banking footprints, selling in some of this relationship pricing, but then also including things like Innovation Studio and some of these AI SKUs, where should we expect the most movement in terms of revenue growth over the next couple of years? And how might that dynamic change as you look out 5-plus years from here? Matthew Flake: Well, 5 years, Matt. I don't know if I can do that. But I will say that it's a tough question to answer, which is probably a good question, but it's -- I was with a bank a couple of weeks ago that is running our commercial product and they're running a legacy product for retail. And they just said, it's so frustrating for our commercial customers that use our retail platform because the commercial product is so much easier to use than the retail one. So we just need to switch and get it all on a single platform. There's opportunities like that all over in our customer base, especially in the upper end of Tier 1 and enterprise where we can go cross-sell those products. Then you get into the fraud conversation, and you talked about what I said earlier about the power of the single platform in the fraud business. Relationship pricing, clearly, we're beginning to show a lot of success there. Innovation Studio is an endless opportunity with our customers with more than 200 partners in there. So -- and then you add in our growing confidence in our AI capabilities and our AI products, there's a lot there. I would probably think that fraud, Innovation Studio and our AI products will certainly have a very long tail on them, as I said earlier. But digital banking, we're adding new deals every quarter and some of them are buying one aspect of the product rather than they're buying commercial or retail. So there's just a lot of opportunity in the breadth of products that we're rolling out and our focus on customer experience is -- seems to be a big differentiator for us. Matthew VanVliet: All right. Very helpful. And then Jonathan, on the margin expansion, obviously, continues to be very strong here, but you highlighted OpEx continuing to grow. Obviously, the business is growing, and that's a requirement. But how should we think about the pace of OpEx growth over the next couple of years? Are there any major sort of step function investments you feel like are needed? Or have you made a lot of those and a lot of the internal efficiencies you're going could see greater upside as growth continues and you just get sort of general leverage in the business? Jonathan Price: Yes. I mean it's sort of all of the above. I mean, when you think about now what we've done year-to-date in '26 and with lifting our EBITDA guide for the rest of the year, you're seeing some pretty strong outperformance in terms of operating leverage both from the gross margin step up in the first half and ongoing OpEx leverage in the back half. As you step forward beyond 2026, I would continue to lean on our long-term framework, which we still have conviction in. I mean, obviously, with the out performance this year, the bar is higher, but we feel good about the continued opportunities. And obviously, there is a new, I'll just call it, line item in the P&L when it comes to AI-related infrastructure costs and token costs and the like. And when I think about the guidance we have for the rest of '26 and how we're thinking about planning for '27, we think we have a pretty good handle on that incremental spend relative to, obviously, a couple of years ago where it didn't exist. So right now, it's -- we're just focused heads down executing and I think there continues to be a margin expansion story here. And obviously, the investments that you've talked about just now that we continue to make even here heavily in the third and fourth quarter of '26, we think are foundational to continuing the subscription growth trajectory that we're on. So we're kind of trying to do both concurrently, and we feel good about that path. So I wouldn't add anything quantifiably beyond '26 other than what's already out there in terms of the long-term framework though. Operator: Your next question comes from Dan Perlin with RBC Capital Markets. Daniel Perlin: Great quarter, and congrats on repaying the convert. I'm sure that was a huge burden to get rid of. Jonathan, I actually wanted to follow up on exactly what you just said about token costs and understanding the dynamics about how that might play through over the course of the next 12, 18, maybe 24 months. So like maybe can you just talk about how you've gotten comfortable with that, what the model looks like? I'm assuming it's token plus a margin to cost plus some sort of margin. But just anything you could provide there as we think about that part of the business ramping. It feels like it's a sizable blind spot for a lot of clients also. But at the same time, you guys can maybe provide some scale to those clients, and therefore, it's a huge benefit to them. So just any of those dynamics would be helpful. Jonathan Price: Yes, it sounds like you're talking about the cost structure of the external products. Most of what I was referring to in the prior answer was really about our cost internally when it comes to everything we're doing with AI, including building those external products. In terms of how we're managing the cost structure, again, we're in EA on the 3 that we've announced and talked about, we think we have the proper guardrails in place in terms of caps and the ability to throttle token utilization embedded in the product, and we have a pricing scheme that will manage that. Internally, we're very, very focused on model management and enablement of the organization to optimize for things like cashing and effective prompting, ultimately to just bend the curve of what we've seen throughout the latter part of '25 and through here July of '26, where the run rate is exponential in terms of the spend compared to just a year or 2 ago. But now we're just figuring out the right mix of what model to use for what team, for what use case and that gives us confidence that we'll be able to be in the right place when it comes to the amount of spend in totality, both for internal usage and for building external product and for customers as they use those external products that will be in a healthy place. But especially on the external side, we're still very much testing this in the EA phase. Daniel Perlin: Yes. No, that's really helpful. Just a follow-up. It's a little -- maybe a little bit more a one-off in a lot of ways. But there's just so much demand that you constantly have been talking about. So this isn't like the only quarter. It's been several quarters now for some time. And I'm just wondering, like is the go-to-market motion for the team and like the sales force efficiency, are they running hot and to the point where you need more potentially out of them and there, therefore, you might need to expand? Or are you comfortable with the team you got on the field to get you to kind of the growth goals that you've provided to the Street, but at the same time, if you gave a little bit more, would you be able to throttle up that revenue growth and maybe arc it up as we go into '27? Matthew Flake: Dan, I think we've got good coverage ratios where they come in. It's -- and also remember, as I talked about earlier, it's not just digital banking, it's relationship pricing, fraud, innovation studio, the AI products. I feel good about the coverage we have right now on -- based on the number of deals we're doing in coverage. But if we see -- and as you said, this has been multiple quarters and we continue to deliver. But more sales reps doesn't always solve the problem. It shrinks commission rates, the amounts of wins. And so I want to make sure as a salesperson myself, I want to make sure they can make as much money as they possibly can. But I don't see it as a situation where we're understaffed or under provisioned on the sales and go-to-market side, the success team and the sales team and the specialists and everybody involved do a great job. I'm happy with what they're doing. They just got to keep it up and continue to make sure we keep winning. Operator: And the next question is from Michael Infante with Morgan Stanley. Michael Infante: I wanted to piggyback on Parker's question earlier, mainly because if I carry forward that low 20s net new subs ARR range from the first half throughout the balance of the year. I think I get subs ARR sort of exiting '26 at or above [ $870 million ], which is around sub-12% growth. So I guess the question is just given your reiteration of '27, like are you implicitly saying and/or expect that the back half from a net new perspective will accelerate? And how should we be thinking about the key drivers of that? Jonathan Price: Well, I mean, when you look at the 2027 subs revenue growth guide of 12.5% to 13%, and you think about where we were in the first half of this year, which was a meaningful premium to that actually implies a modest decel in the back half when it comes to those metrics. But again, we feel good about -- you've got to remember, in the Q3 and Q4 period, A, we have tougher comps than we faced, especially in the second quarter, but even all of the first half. But we also expect a higher mix of these larger Tier 1 and enterprise deals. So we definitely think we're going to -- assuming we execute on the bookings front, that we're going to be in a good position vis-a-vis that '27 goal. And obviously, all hands on deck to meet or exceed that. But when we think about sort of where we were from a subs ARR perspective, call it, this time a year ago, you can kind of see the leading indicator is telling you what that means for subs growth here in the back half of '26. And we'll see where subs ARR comes in based on our bookings, to you're right, the incremental subs dollars that we deliver here in the Q3 and Q4 time frame. But the baseline is going up, the law of large numbers is present, and so we got to execute at a higher and higher level as time goes on. And so that's why we go back to all of these other products we have, the cross-sell opportunity, the continued execution on the net new front because we sort of have to see that success on all those dimensions to continue seeing this business grow at the levels that we've talked about and higher. So hopefully, that answers your question, Michael, but let me know if there's any follow-up there. Michael Infante: No, it does, and it makes sense in relation to the slope of net new last year in the back half as well. Just a second one, you sort of alluded to it being early in terms of you internally sort of figuring out some of these optimization dynamics on the actual compute cost. But have you sort of learned anything incrementally as it relates to the gross margin profile of some of this AI-delivered functionality? Do you expect it will be broadly in line with the aggregate business? Do you think it will potentially be accretive depending on what you're able to do internally from a model routing perspective in some of your internal sort of ML use cases? How are you sort of thinking about it early days? Jonathan Price: Yes. I mean you framed up all of the work we're doing. It's a difficult question to answer today, not just because it's early adopter, but because it may vary wildly by product. And then the question then becomes what products scale up that ultimately become meaningful revenue contributors and then it may be accretive or dilutive to gross margin accordingly. So it's a pretty difficult question to answer right now given where we are on all three of them. I can tell you when it comes to all the AI usage internally and managing that not only optimizing for where it falls on the P&L between cost of goods sold and primarily R&D, but OpEx otherwise. We're doing a lot of work there, and then we're being thoughtful around how do we make sure that we're using the right model and the right level of spend for the right use case because in the early days, there wasn't a lot of management around that admittedly. And so now as these numbers are getting larger and larger, making sure that we're being thoughtful about it and working with the teams around the ROI when we think about how much we spend to deliver a certain outcome, it's just a muscle we're building in real time, and that's going to be a big part of our journey here over the next for sure, 6 to 12 months. Operator: And your next question comes from Cris Kennedy with William Blair. Cristopher Kennedy: Last quarter, you talked about a large fraud deal being larger than a digital bank customer win. Can you just provide a little bit more perspective on your relationship pricing business, the size of those types of contracts, especially as you have a lot of momentum today? Jonathan Price: Yes. I mean, maybe use the example that was cited in the script when we think about that top 25 bank, that deal would look like a very large Tier 1 digital banking deal. I mean, obviously, that's a big institution. So it's a good example of one that should naturally be large. But like Matt said earlier, when you have 9 of the top 15 banks for that product, it skews to the enterprise banks and it skews to higher ASPs. So when you're asking about relationship pricing, obviously, it's a top-heavy product in terms of the customer base, but that also means from an ASP perspective that's going to be representative of a pretty large Tier 1 digital banking deal or larger. Cristopher Kennedy: Got it. And then now that the balance sheet is in a really good position. Can you just remind us of kind of capital allocation priorities and kind of build partner versus buy, especially with innovation studio partners? Jonathan Price: Yes. I mean we feel great about the position we're in. Obviously, alongside this earnings call, we've announced the Board authorizing an incremental $350 million share repurchase program are on top of our existing programs. So we feel good that when it comes to that opportunity, we can be thoughtful and at the appropriate times, exercise that lever. And then at all other times, we now have, we think, the flexibility and the scale to continue to invest back in the business and you directly see that based on our '27 EBITDA targets. You can see the margin expansion is lighter than what we did in '24 and '25 and what we're now guiding to for full year '26. So that's an example of us reinvesting back in the business to elongate this growth curve. And then when it comes to M&A, we think now with the debt paid off and the free cash flow generation, as you've seen, we haven't done deals and it's been over 5 years since we've done anything. So we're not going to do deals for the sake of doing deals, but we certainly have the capacity and the ability to be opportunistic now when the time comes. So long-winded answer, but the reality is it's all three of those things that we're going to be able to optimize for now going forward. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Q2, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Q2 wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Q2. The Motley Fool has a disclosure policy. Q2 Holdings (QTWO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

These 3 Fintech Stocks Offer High Risk/Reward Potential Q2 (NYSE:QTWO) reported second-quarter 2026 results above the high end of its guidance, citing subscription revenue growth, record adjusted EBITDA and continued demand for its digital banking, fraud, commercial banking and Relationship Pricing offerings. Revenue totaled $219.8 million, up 13% from a year earlier and 2% sequentially. Adjusted EBITDA reached a record $62.8 million, or 28.6% of revenue, while free cash flow was $51 million. The company raised its full-year outlook for revenue and adjusted EBITDA and increased its expected subscription revenue growth rate. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Why Q2 Holdings Stock Could Be Your Next Big Buy Chief Financial Officer Jonathan Price said subscription-based revenue rose 15% year over year and represented 83% of total revenue at quarter-end. Revenue growth was driven primarily by new customer go-lives and expansions among existing customers. Total annualized recurring revenue reached $971 million, up 13% from $861 million a year earlier and 3% from the first quarter. Subscription ARR increased 15% to $826 million. Ending backlog was $2.8 billion, increasing 17% year over year and 1% sequentially. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Non-subscription revenue was roughly flat from the prior-year period. Price said growth in transactional revenue was largely offset by continued pressure in discretionary professional-services offerings, a trend the company expects to persist. Non-GAAP gross margin was 62.3%, up about 480 basis points year over year and 20 basis points sequentially. Price attributed the improvement in part to the completion of Q2’s cloud migration earlier this year and to a larger mix of higher-margin subscription revenue. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Operating expenses totaled $81.7 million, or 37.2% of revenue. The year-over-year increase was primarily related to higher research-and-development personnel costs supporting product and artificial-intelligence investments. Adjusted EBITDA grew 37% from the prior year, with margin expanding about 510 basis points. Chief Executive Officer Matt Flake said the company recorded eight Tier 1 and enterprise wins across its portfolio during the quarter. He highlighted customer activity in digital banking, risk and fraud, and Relationship Pricing. One top-25 U.S. bank expanded its relationship with Q2 by adopting its Relationship Pricing capabilities. The bank had initially selected Q2’s small-business and commercial digital banking products in 2023, then added risk and fraud products in 2025. Flake said the latest expansion demonstrated the company’s land-and-expand strategy and the potential to sell several product lines to large customers over time. Flake also described a Tier 1 digital banking win tied to consolidation in the banking industry. A Q2 customer with approximately $2 billion in assets was acquired by a bank with approximately $9 billion in assets. Following a competitive review that included the acquiring bank’s incumbent provider, the combined institution chose Q2’s platform for the entire bank. The company said banking-sector mergers and acquisitions can create opportunities whether a Q2 customer is the acquirer or the acquired institution, as the combined bank reassesses the technology it needs after a transaction. At its CONNECT 26 customer conference, Q2 introduced and demonstrated several AI-related offerings. Flake said customer conversations centered on practical applications that could improve banker productivity, speed the development of personalized digital experiences and strengthen fraud protection. Q2 Assistant: An AI capability intended to help bankers use natural language to access information and navigate workflows within the digital banking platform. Q2 Code: An AI-assisted development capability that uses natural-language prompts and Q2’s software development kit to help customers, partners and Q2 teams build and customize digital experiences. Account Takeover: A fraud product that uses AI to monitor behavioral signals and user interactions, identify potential account compromise and intervene in real time. Flake said Q2 Assistant was the most frequently demonstrated item in the company’s exhibit hall at CONNECT. The Account Takeover product has already attracted a double-digit number of early-adopter customers, while Q2 Code and Q2 Assistant each had single-digit early-adopter participation at the time of the call. The company expects the products to reach general availability in the fourth quarter. Price said revenue conversion from these products should be materially faster than a digital banking or Relationship Pricing implementation, though management said it was too early to provide specific revenue timing or financial contribution estimates. Management also said the fraud portfolio is growing faster than the overall business and could continue to do so for years. Flake said Q2’s platform position across retail, small-business and commercial banking gives the company access to behavioral and transaction data that can help identify unusual activity. Q2 ended the quarter with $106 million in cash equivalents and investments, compared with $379 million at the end of the first quarter. The decline reflected repayment of $304 million in convertible notes at maturity and $23 million in share repurchases. With the June retirement of its final convertible notes tranche, Q2 ended the quarter debt-free. The company repurchased approximately $125 million of stock under its existing $150 million authorization through the end of the quarter. Its board approved an additional $350 million repurchase authorization, bringing total available capacity to approximately $375 million. For the third quarter, Q2 forecast revenue of $218.5 million to $222.5 million and adjusted EBITDA of $58.5 million to $61.5 million. For full-year 2026, the company projected revenue of $881 million to $886 million, representing approximately 11% growth, and adjusted EBITDA of $244 million to $248 million, or approximately 28% of revenue. Q2 raised its full-year subscription revenue growth expectation to approximately 14.5% from a prior forecast of 14%. Price said the increase reflected year-to-date bookings strength and first-half subscription revenue performance. Q2 Holdings, Inc develops and delivers cloud-based digital banking solutions that enable banks and credit unions to enhance customer and member experiences. The company's core offerings include the Q2 Platform, a comprehensive suite of online and mobile banking applications for retail and commercial customers, as well as digital onboarding, payments, and fraud prevention tools. Q2's platform also provides analytics and reporting capabilities designed to help financial institutions tailor products, optimize workflows, and drive engagement. Founded in 2004 and headquartered in Austin, Texas, Q2 serves hundreds of financial institutions across the United States and Canada. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Q2 Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by the continued strength of the subscription model and healthy demand for mission-critical solutions, resulting in 13% year-over-year revenue growth. Management highlighted a 'land and expand' success story where a top 25 U.S. bank adopted three major product lines—digital banking, risk and fraud, and relationship pricing—within three years. Banking sector M&A continues to serve as a growth catalyst, exemplified by a $9 billion acquirer choosing to adopt Q2's platform across the entire combined entity following a competitive evaluation. The company is pivoting from AI as a broad concept to 'practical AI' applied to real workflows, focusing on banker efficiency, personalized digital experiences, and real-time fraud protection. Strategic positioning is reinforced by the Q2 Innovation Studio, which allows customers and partners to tailor the platform, now enhanced by AI-assisted development capabilities via Q2 Code. Fraud protection has emerged as a central growth opportunity as financial institutions seek trusted platforms capable of monitoring behavioral signals and intervening in real time. Full-year 2026 subscription revenue growth expectations were raised to approximately 14.5%, reflecting strong year-to-date bookings and first-half performance. Management expects ongoing pressure in discretionary professional services revenue, which is factored into the updated annual guidance range. The company anticipates general availability for new AI products, including Q2 Assistant and Q2 Code, by the fourth quarter of 2026. Guidance assumes a higher mix of larger Tier 1 and enterprise deals in the second half of the year, which may lead to a modest deceleration in subscription ARR growth due to tougher comparisons. Future margin expansion strategy balances cloud optimization and AI infrastructure costs with the goal of sustaining durable subscription growth and driving long-term operating leverage. Q2 retired its last tranche of convertible notes in June, totaling $304 million, leaving the company debt-free and increasing balance sheet flexibility. The Board of Directors approved an additional $350 million share repurchase authorization, bringing total available capacity to approximately $375 million. Gross margin improvement of 480 basis points year-over-year reflects the successful completion of the cloud migration and a revenue mix shift toward higher-margin subscriptions. Management is actively monitoring 'token costs' and AI infrastructure spend, implementing internal guardrails and model management to optimize the ROI of AI initiatives. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is using AI internally to make delivery teams more efficient, potentially increasing the number of projects a team can carry simultaneously. While digital banking implementations remain complex, new AI-driven fraud and assistant products are expected to have materially faster time-to-revenue than core platform installs. Q2 believes its single-platform approach for retail and commercial banking provides a data advantage for identifying behavioral signals that point to account takeover. The company reported double-digit early adopters for its new AI-based account takeover product, indicating strong immediate demand for real-time intervention tools. Relationship pricing was described as the 'bell of the ball' this quarter, particularly for large enterprise banks looking to price both sides of the balance sheet in an integrated way. Most current success involves selling relationship pricing into the existing commercial customer base, though management sees long-term potential to flip that dynamic.

This article first appeared on GuruFocus. Revenue: Total revenue of $219.8 million, up 13% year-over-year. Subscription Revenue: Grew 15% year-over-year, representing 83% of total revenue. Total ARR: $971 million, up 13% year-over-year. Subscription ARR: $826 million, up 15% year-over-year. Backlog: $2.8 billion, up 17% year-over-year. Non-GAAP Gross Margin: 62.3%, up approximately 480 basis points year-over-year. Adjusted EBITDA: $62.8 million, up 37% year-over-year. Adjusted EBITDA Margin: 28.6%, expanding approximately 510 basis points year-over-year. Free Cash Flow: $51 million generated in the quarter. Cash and Investments: $106 million at quarter end. Share Repurchases: $23 million in the quarter; Board approved an additional $350 million authorization. Guidance (Full Year 2026): Revenue of $881 million to $886 million (approximately 11% growth); Adjusted EBITDA of $244 million to $248 million (approximately 28% of revenue). Warning! GuruFocus has detected 3 Warning Sign with PI. Is QTWO fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Q2 Holdings Inc (NYSE:QTWO) delivered another strong quarter with revenue of $219.8 million, up 13% year-over-year, and record adjusted EBITDA of $62.8 million, exceeding guidance. The company secured eight Tier 1 and enterprise wins in the quarter, demonstrating strong demand across digital banking, risk and fraud, and relationship pricing. Subscription ARR grew 15% year-over-year to $826 million, driven by new customer wins and expansions, with full-year subscription revenue growth guidance raised to approximately 14.5%. New AI products like Q2 Assistant, Q2 Code, and account takeover fraud solutions received strong customer interest, with double-digit early adopters for the fraud product. The company retired its convertible notes, ending the quarter debt-free, and announced a $350 million increase in share repurchase authorization, reflecting confidence in long-term value. Total ARR growth of 13% remains below subscription ARR growth due to ongoing pressure in non-subscription revenue, particularly discretionary professional services. Non-subscription revenue was roughly flat year-over-year, with growth in transactional revenue offset by declines in discretionary services, a trend expected to continue. Operating expenses increased year-over-year, driven by higher R&D costs for product and AI investments, which could pressure margins if not managed. The company faces tough comparisons in the second half of 2026, which may moderate subscription ARR growth and require strong execution to meet guidance. AI product revenue contribution is still early-stage, with general availability expected in Q4 2026, and the financial impact remains uncertain until further quarters of data. Here are the key highlights from the Q2 Holdings Inc (NYSE:QTWO) Q2 2026 earnings call, focusing on the most significant Q&A exchanges. Q: Can you talk about how bringing more agentic solutions to market, particularly on the fraud side, has catalyzed any change in core digital banking cross-sell opportunities or win rates? A: (Matthew Flake, CEO) The customer engagement at our Connect conference was very strong. Customers are leaning on us as a trusted partner to provide AI solutions, which is creating opportunities. The lines formed around our AI products (Q2 Assistant, Q2 Code, and fraud products) because they hit exactly where customers want value: protecting deposits, making bankers more productive, and personalizing experiences. This drives confidence in our ability to deliver technology, which helps with renewals, extensions, and cross-selling. While we are not ready to quantify the financial gain, the energy is adding a lot to cross-selling with existing customers and will help win net new deals, as few vendors are bringing real, practical AI solutions to the table. Q: With the cloud migration completed earlier this year, can you update us on the subscription gross margin opportunity over the next couple of years? A: (Jonathan Price, CFO) We are pleased with the progress and are learning to operate more effectively in this new environment. From a total revenue perspective, the mix will continue to shift towards higher-margin subscription revenue, which will put upward pressure on gross margins. Beyond that, we have many initiatives in place, including cloud optimization and AI-driven efficiencies, to continue working towards our long-term gross margin goal. This year was a big step function, and we feel good about the direction we are heading. Q: The second quarter is typically a seasonally softer quarter for net new subscription ARR, yet this print looks like one of your stronger second quarters. How much of the recent fraud tech and relationship pricing wins are already flowing into ARR versus how many quarters away are those larger deals? A: (Jonathan Price, CFO) The strong first half on subscription ARR benefited from a favorable comparison to Q2 2025. When you back out that dynamic, Q2 is very similar to Q1 from a year-over-year perspective. We had strong success in relationship pricing and fraud, but I wouldn't call out those deals as drivers more than any other wins. We feel good about the pipeline and the opportunity set. Our guide for the rest of the year tells you how we are looking at the second half for subscription revenue growth, and our job is to execute on bookings to set ourselves up for a strong 2027. Q: Do you see a realistic path to using AI to meaningfully compress digital banking implementation timelines? A: (Matthew Flake, CEO) The customer's project timeline is typically 9 to 12 months. What we are trying to do first is make our own teams more efficient, so they can carry more projects at once. We are widely using AI within our delivery teams and are seeing some gains. Ultimately, this should translate to making it easier for the financial institution to implement. It will take more time, but we are hard at work on making the implementation more efficient for us and providing tools to make it easier for them. Q: Is the risk and fraud business going to outgrow your overall subscription revenue growth for some time, and where are you in terms of monetizing that product set within your installed base? A: (Jonathan Price, CFO) The fraud portfolio is growing at a premium to the total business, and we think there is an opportunity for that to be true for years to come, especially with the new AI fraud products like account takeover. (Matthew Flake, CEO) Unfortunately, fraudsters are also innovating, so this has a long tail. We have to continue to develop new shields against new weapons, which creates a never-ending cycle of demand. Q: You mentioned synergies between commercial banking and relationship pricing. Are these synergies driving more relationship pricing upselling, or are they also driving more commercial banking transactions? A: (Matthew Flake, CEO) We are likely having more success selling relationship pricing to an existing commercial customer. However, as we develop a deeper relationship with these customers on both sides, they begin to trust us and understand the quality of our work. This creates more opportunities as financial institutions look to consolidate vendors. Our customer success team does a fantastic job of ensuring customers understand the breadth of our product suite. Q: How should we think about the pace of OpEx growth over the next couple of years? Are there any major step-function investments needed? A: (Jonathan Price, CFO) We are seeing strong operating leverage from the gross margin step-up and ongoing OpEx leverage. Beyond 2026, we continue to lean on our long-term framework. There is a new line item in the P&L for AI-related infrastructure and token costs, but we feel we have a good handle on that incremental spend. We are focused on executing and believe there is a continued margin expansion story here. The investments we are making are foundational to continuing our subscription growth trajectory. Q: Can you provide more perspective on the relationship pricing business and the size of those contracts, especially given the momentum? A: (Jonathan Price, CFO) The example of the TOP25 bank in the script is a good one. It is a very large institution, so the deal is naturally large. Relationship pricing is a top-heavy product in terms of the customer base, which means the average selling price (ASP) is representative of that. (Matthew Flake, CEO) We feel great about our position. We have nine of the top 15 banks for digital banking, and we are now seeing them expand into relationship pricing, which is a powerful validation of our land-and-expand model. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q2 Holdings (QTWO) came out with quarterly earnings of $0.7 per share, beating the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.5 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.48%. A quarter ago, it was expected that this provider of online banking software would post earnings of $0.71 per share when it actually produced earnings of $0.63, delivering a surprise of -11.27%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Q2 Holdings, which belongs to the Zacks Internet - Software industry, posted revenues of $219.77 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.26%. This compares to year-ago revenues of $195.15 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Q2 Holdings shares have lost about 17.9% since the beginning of the year versus the S&P 500's gain of 8.5%. While Q2 Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Q2 Holdings was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.67 on $219.92 million in revenues for the coming quarter and $2.61 on $879.07 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Compass, Inc. (COMP), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +28.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Compass, Inc.'s revenues are expected to be $4.1 billion, up 99.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Q2 Holdings, Inc. (QTWO) : Free Stock Analysis Report Compass, Inc. (COMP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

AUSTIN, Texas, July 29, 2026--(BUSINESS WIRE)--Q2 Holdings, Inc. (NYSE: QTWO), a leading provider of digital transformation solutions for financial services, today announced results for its second quarter ending June 30, 2026. GAAP Results for the Second Quarter 2026 Revenues of $219.8 million, up by 13 percent compared to the prior-year quarter and 2 percent from first quarter 2026. GAAP gross margin of 59.2 percent, up from 53.6 percent in the prior-year quarter and 59.1 percent in first quarter 2026. GAAP net income of $29.9 million, up from $11.8 million for the prior-year quarter and $26.6 million for first quarter 2026. Non-GAAP Results for the Second Quarter 2026 Non-GAAP gross margin of 62.3 percent, up from 57.5 percent for the prior-year quarter and 62.1 percent in first quarter 2026. Adjusted EBITDA of $62.8 million, up from $45.8 million for the prior-year quarter and $60.0 million for first quarter 2026. For a reconciliation of our GAAP to non-GAAP results, please see the tables below. "We delivered another strong quarter of consistent execution, with solid bookings across our solution portfolio, while also delivering more than 500 basis points of adjusted EBITDA margin expansion from the prior year quarter," said Matt Flake, Chairman, President and CEO, Q2. "Customers increasingly view Q2 as a strategic partner, evidenced by a top 25 U.S. bank that added relationship pricing this quarter to a partnership that already spans our commercial digital banking and risk and fraud solutions. That same platform breadth is what we believe positions us for the road ahead: extending AI and fraud innovation across our customer base, which was front and center at our largest CONNECT yet. With a healthy pipeline entering the second half, we remain confident in our ability to execute and deliver long-term value." "Our record revenue, gross margin, and adjusted EBITDA this quarter demonstrate the continued strength and scalability of our financial model," said Jonathan Price, CFO, Q2. "We also retired our convertible notes in June, ending the quarter debt-free, which we believe gives us greater flexibility in how we finance the business and additional optionality in how we allocate capital going forward. This performance, coupled with our outlook for the remainder of the year, has given us the confidence to raise our full-year guidance on both revenue and adjusted EBITDA for 2026. We remain dedicated to delivering growth, margin expansion, and improved capital efficiency as we continue to drive value for our shareholders." Price added that the Company’s performance, outlook and debt-free balance sheet supported the Board of Directors’ decision to approve up to an additional $350 million of share repurchases, following the $150 million authorization announced in November 2025. Second Quarter Highlights Signed eight Enterprise and Tier 1 contracts in the quarter highlighted by: Subscription Annualized Recurring Revenue increased to $825.5 million, up 15 percent year-over-year. Remaining Performance Obligations total, or Backlog, increased by $21.6 million sequentially and $404.3 million year-over-year, resulting in a total committed Backlog of approximately $2.8 billion at quarter-end, representing 1 percent sequential growth and 17 percent year-over-year growth. In the second quarter ended June 30, 2026, Q2 repurchased 0.5 million shares of the Company's outstanding common stock at an average share price of approximately $45.67 for total consideration of $22.9 million. As of the end of the quarter, Q2 had $24.9 million remaining on its $150 million share repurchase authorization announced in November 2025. CONNECT 26: Customers Move from Interest to Action on AI and Fraud Record attendance: Q2’s annual CONNECT customer conference drew its largest-ever audience with over 1,500 attendees representing over 900 existing and prospective customers. Who attended: Participants spanned executives from financial institutions and leaders across relationship pricing, risk & fraud, digital banking and AI, as well as partners from our Innovation Studio ecosystem, reflecting how central Q2 has become to the customer and partner ecosystem. AI front and center: Q2 introduced Q2 Assistant, an embedded capability that lets bankers use natural language to access information and navigate workflows and was the most-demoed product at the event, and demonstrated Q2 Code, its AI-assisted development capability. Fraud as a top priority: Q2 showcased its new account takeover capabilities through User Activity Monitoring, which uses AI to detect and intervene on potential compromise in real time, and already has double-digit early-adopter customers. The takeaway: Customers are moving from AI curiosity to AI adoption, turning to Q2 as a trusted partner for practical, workflow-driven innovation. Share Repurchase Program Today, Q2 also announces that its Board of Directors has approved up to an additional $350 million of share repurchases, bringing total currently available repurchase capacity to approximately $375 million. Q2 may purchase shares in the open market or in privately negotiated transactions, including accelerated share repurchase transactions, block trades, or pursuant to Rule 10b5-1 trading plans. Financial Outlook As of July 29, 2026, Q2 Holdings is providing guidance for its third quarter of 2026 and updated guidance for its full year 2026, which represents Q2 Holdings’ current estimates on Q2 Holdings’ operations and financial results. The financial information below includes adjusted EBITDA, which represents forward-looking, non-GAAP financial information. GAAP net income is the most comparable GAAP measure to adjusted EBITDA. Adjusted EBITDA differs from GAAP net income in that it excludes items such as depreciation and amortization, stock-based compensation, transaction-related costs, interest and other (income) expense, income taxes, lease and other restructuring charges, and non-recurring legal settlements not in our ordinary course of business. Q2 Holdings is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Q2 Holdings has not provided guidance for GAAP net income or a reconciliation of the foregoing forward-looking adjusted EBITDA guidance to GAAP net income. However, it is important to note that these excluded items could be material to Q2's results computed in accordance with GAAP in future periods. Q2 Holdings is providing guidance for the third quarter of 2026 as follows: Total revenue of $218.5 million to $222.5 million, which would represent year-over-year growth of 8 to 10 percent. Adjusted EBITDA of $58.5 million to $61.5 million, representing 27 to 28 percent of revenue for the quarter. Q2 Holdings is providing updated guidance for the full-year 2026 as follows: Total revenue of $881.0 million to $886.0 million, which would represent year-over-year growth of 11 percent. Adjusted EBITDA of $244.0 million to $248.0 million, representing 28 percent of revenue for the year. Conference Call Details All participants must register using the above link. The webcast of the conference call and financial results will be accessible from the investor relations section of the Q2 website at http://investors.Q2.com/. An archived replay of the webcast will be available on this website for a limited time after the call. Q2 has used, and intends to continue to use, its investor relations website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. About Q2 Holdings, Inc. Q2 is a leading provider of digital transformation solutions for financial services, serving banks, credit unions, alternative finance companies, and fintechs in the U.S. and internationally. Q2 enables its financial institution and fintech customers to provide comprehensive, data-driven digital engagement solutions for consumers, small businesses and corporate clients. Headquartered in Austin, Texas, Q2 has offices worldwide and is publicly traded on the NYSE and NYSE Texas under the stock symbol QTWO. To learn more, please visit Q2.com. Follow us on LinkedIn and X to stay up to date. Use of Non-GAAP Measures Q2 uses the following non-GAAP financial measures: adjusted EBITDA; adjusted EBITDA margin; non-GAAP gross margin; non-GAAP gross profit; non-GAAP sales and marketing expense; non-GAAP research and development expense; non-GAAP general and administrative expense; non-GAAP operating expense; non-GAAP operating income; non-GAAP net income; non-GAAP net income per common share, diluted; and free cash flow. Management believes that these non-GAAP financial measures are useful measures of operating performance because they exclude items that Q2 does not consider indicative of its core performance. In the case of adjusted EBITDA, Q2 adjusts net income for such items as interest and other (income) expense, taxes, depreciation and amortization, stock-based compensation, transaction-related costs, lease and other restructuring charges, and non-recurring legal settlements not in our ordinary course of business. In the case of adjusted EBITDA margin, Q2 calculates adjusted EBITDA margin by dividing adjusted EBITDA by revenue. In the case of non-GAAP gross margin and non-GAAP gross profit, Q2 adjusts gross profit and gross margin for stock-based compensation, amortization of acquired technology, transaction-related costs and lease and other restructuring charges. In the case of non-GAAP sales and marketing expense and non-GAAP research and development expense, Q2 adjusts the corresponding GAAP expense to exclude stock-based compensation. Non-GAAP general and administrative expense excludes stock-based compensation and non-recurring legal settlements not in our ordinary course of business. Non-GAAP operating expense is calculated by taking the sum of non-GAAP sales and marketing expenses, non-GAAP research and development expense and non-GAAP general and administrative expense. In the case of non-GAAP operating income and non-GAAP net income, Q2 adjusts operating income, for stock-based compensation, transaction-related costs, amortization of acquired technology, amortization of acquired intangibles, lease and other restructuring charges and non-recurring legal settlements not in our ordinary course of business, and with respect to non-GAAP net income, Q2 additionally adjusts for amortization of debt issuance costs and the related tax effects of the adjustments above. The tax effect of non-GAAP adjustments is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment and considers the current and deferred tax impact of those adjustments. The Company is in a cumulative income position on a non-GAAP basis and has not recorded a valuation allowance against deferred tax assets in the non-GAAP tax provision. As a result, the non-GAAP tax expense may differ significantly from the GAAP tax expense. In the case of non-GAAP net income per common share, diluted, Q2 divides non-GAAP net income by the diluted weighted average common shares outstanding. In the case of free cash flow, Q2 adjusts net cash provided by (used in) operating activities for purchases of property and equipment and capitalized software development costs. A reconciliation of prior quarter non-GAAP financial measures to the nearest comparable GAAP measures may be found in Exhibit 99.1 of Q2's Form 8-K filed on April 29, 2026. There are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income. As a result, these non-GAAP financial measures have limitations and should be considered in addition to, not as a substitute for or superior to, the closest GAAP measures, or other financial measures prepared in accordance with GAAP. A reconciliation to the closest GAAP measures of these non-GAAP measures is contained in tabular form on the attached unaudited condensed consolidated financial statements. Q2’s management uses these non-GAAP measures as measures of operating performance; to prepare Q2’s annual operating budget; to allocate resources to enhance the financial performance of Q2’s business; to evaluate the effectiveness of Q2’s business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of Q2’s results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communication with our board of directors concerning Q2’s financial performance. Forward-looking Statements This press release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact, including statements about: customer perception of Q2 as a strategic partner; the ability of our platform breadth to position us for the road ahead, including by extending AI and fraud innovation; the health of our sales pipeline; our ability to execute and deliver long-term value; our balance sheet strength and resulting flexibility in how we finance the business and the additional optionality for capital allocation it provides; our focus on delivering growth, margin expansion, and improved capital efficiency, and to drive shareholder value; the capabilities and demand for our AI solutions, including Q2 Assistant, Q2 Code and our new account takeover product; customer trust and demand for Q2’s AI solutions; and our quarterly and annual financial guidance. The forward-looking statements contained in this press release are based upon Q2’s historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates or expectations will be achieved. Factors that could cause actual results to differ materially from those described herein include risks related to: (a) the risks associated with cyberattacks, financial transaction fraud, data and privacy breaches and breaches of security measures within our products, systems and infrastructure or the products, systems and infrastructure of third parties upon which we rely and the resultant disruption, costs and liabilities and harm to our business and reputation and our ability to sell our solutions; (b) the risks associated with rapidly evolving technologies, such as quantum computing, and advances in artificial intelligence, or AI, including the increasing availability of more capable AI models to the public that may further enhance the ability of threat actors or autonomous AI agent systems to identify, develop and exploit vulnerabilities, automate certain aspects of cyberattacks and conduct more targeted or scalable social engineering, fraud schemes or end-to-end intrusions; (c) the impact of and our ability to respond to global economic uncertainties and challenges or changes in the financial services industry and credit markets, including as a result of mergers and acquisitions within the banking sector, inflationary pressures, fluctuating interest rates, instability in the financial services industry, any changes to, or new, financial regulations and their potential impacts on our prospects' and customers' operations, increased acceptance and use of emerging financial products, such as cryptocurrencies or stablecoin, including any impact on the timing of prospect and customer implementations and purchasing decisions, our business sales cycles and on account holder or end user, or End User, usage of our solutions; (d) the risks associated with continued market volatility, including in the financial services sector, potential inflationary pressures and the impact of any monetary policy changes that may be implemented as a result, the possibility and potential impact of any U.S. tariffs and global trade measures, including retaliatory tariffs and the impact on the valuation of marketable securities; (e) the risk of increased or new competition in our existing markets and as we enter new markets or new segments of existing markets, or as we offer new solutions; (f) the risks associated with the development of our solutions, including AI-based solutions, our AI and data strategies and solutions, our use of AI tools and solutions, changes to regulation related to AI and data privacy and any discordance between the market for our solutions compared to our expectations; (g) quarterly fluctuations in our operating results relative to our expectations and guidance and the accuracy of our forecasts; (h) the risks and increased costs associated with managing growth and global operations, including hiring, training, retaining and motivating employees to support such growth; (i) the risks associated with our transactional business which are typically driven by End-User behavior and can be influenced by external drivers outside of our control; (j) the risks associated with effectively managing our business and cost structure in an uncertain economic environment, including as a result of challenges in the financial services industry and the effects of seasonality and unexpected trends; (k) the risks associated with geopolitical instability, including acts of war or military conflict, uncertainties or discord, including the continuing war in Ukraine, the war in Iran and other conflicts in the Middle East and other parts of the world, heightened risk of state-sponsored cyberattacks or cyber fraud on financial services and other critical infrastructure; (l) the risks associated with accurately forecasting and managing the impacts of any economic downturn or challenges in the financial services industry on our customers and their End Users, including in particular the impacts of any downturn on financial technology companies or alternative finance companies and our arrangements with them, which may include more complex revenue arrangements for us and which may be more vulnerable to an economic downturn than our financial institution customers; (m) the challenges and costs associated with selling, implementing and supporting our solutions, particularly for larger customers with more complex requirements and longer implementation processes, including risks related to the timing and predictability of sales of our solutions and the impact that the timing of bookings and go-lives may have on our revenue and financial performance in a period; (n) the risk that errors, interruptions or delays in our solutions or Web hosting negatively impacts our business and sales; (o) the risks associated with the operation of and reliance on third-party public cloud service providers, including any transition, integration, resiliency, performance or cost risks following migration; (p) the difficulties and risks associated with developing and selling complex new solutions and enhancements, including those using AI, in an environment in which the technical and regulatory specifications and functionality required by our customers and relevant governmental authorities are difficult to predict; (q) the risks associated with operating within and selling into a regulated industry, including risks related to the rapidly evolving regulation of, and litigation with respect to, AI and machine learning, the receipt, collection, storage, processing and transfer of data and increased regulatory scrutiny on financial technology and related services, including specifically on banking-as-a-service, or BaaS, services; (r) the risks associated with our sales and marketing capabilities, including partner relationships and the length, cost and unpredictability of our sales cycle; (s) the risks inherent in third-party technology and implementation partnerships, including defects, failures, interruptions or disruptions in third-party services or solutions, that could disrupt our services or otherwise cause harm to our business; (t) the risks associated with our reliance on a limited number of third-party AI vendors and concentration in such relationships, including potential disruption of hosted AI services, pricing increases, contractual limitations or the loss of access to key AI capabilities; (u) the risk that we will not be able to maintain historical contract terms such as pricing and duration; (v) the general risks associated with the complexity of our customer arrangements and our solutions; (w) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (x) the risks and challenges around increased regulatory scrutiny and evolving requirements for money movement services and the resulting potential higher costs, increased complexity and limitations on offerings on our business and financial results; (y) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (z) the risks associated with further consolidation in the financial services industry; (aa) the risks associated with selling our solutions internationally and with the continued expansion of our international operations; and (bb) the risk that we may not be able to obtain capital when desired or needed on favorable terms. Additional information relating to the uncertainty affecting the Q2 business is contained in Q2’s filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Q2’s website at http://investors.Q2.com/. These forward-looking statements represent Q2’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and except as required by law, Q2 disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729254821/en/ Contacts MEDIA CONTACT: Jack McBeeQ2 Holdings, Inc.M: [email protected] INVESTOR CONTACT: Josh YankovichQ2 Holdings, Inc.O: [email protected]