Unless otherwise stated, all financial measures discussed on this call, other than revenue, will be on a non-GAAP basis. 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. 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.

Historically, that has often been because our customers have tended to be healthy, growth-oriented institutions that are on the acquiring side of transactions. 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. This was our biggest conference yet, with record customer and prospect attendance. The customer engagement at CONNECT was very strong, and one of the clearest themes we saw was the demand for practical AI.

As we've discussed in recent quarters, the cost and complexity of fraud continues to increase across financial institutions. That is precisely where Q2 sits, and it is why we believe fraud is one of the most compelling growth opportunities in our portfolio. 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. Total revenue for the second quarter was $219.8 million, an increase of 13% year-over-year and 2% sequentially.

What went well
  • Second-quarter revenue and adjusted EBITDA both came in above the high end of guidance, with record gross margin and record adjusted EBITDA of $62.8 million, up 37% year-over-year at a 28.6% margin (up roughly 510 basis points).
  • Retired the last tranche of 2026 convertible notes ($304 million) at maturity in June, ending the quarter with a cleaner balance sheet, and generated $61 million of operating cash flow and $51 million of free cash flow.
  • Signed eight total Tier 1 enterprise wins, including a Relationship Pricing deal with a top-25 U.S. bank and a competitive Tier 1 win where a $2 billion Q2 customer acquired by a $9 billion bank led the combined entity to standardize on Q2.
  • Raised the full-year 2026 subscription revenue growth expectation to approximately 14.5% from 14%, reflecting strong year-to-date bookings and first-half performance.
  • Announced an additional $350 million share-repurchase authorization, bringing total capacity to about $375 million, and showcased new AI products (Q2 Assistant, Q2 Code, and Account Takeover fraud capabilities) to record attendance at the CONNECT 26 customer conference.
What went wrong
  • Total non-subscription revenues were roughly flat year-over-year as transactional growth was largely offset by ongoing pressure in more discretionary professional-services offerings.
  • Total ARR growth continued to lag subscription ARR growth on the non-subscription trends, and ending backlog of $2.8 billion rose only $22 million, or about 1%, sequentially.

More on Q2 Holdings, Inc.

Reported 2026-07-29 · figures from the Q2 Holdings, Inc. Q2 2026 earnings call.

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