Filing Flows › Q2 Holdings (QTWO) › Q1 2025
Q2 Holdings (QTWO) Q1 2025 earnings results (first quarter 2025)
10-Q filed May 7, 2025
Q2 Holdings (QTWO) reported revenue of $190M for the first quarter 2025 (Q1 2025), +15% from a year earlier and +4% from the quarter before. Operating margin was 1.2%, net earnings $4.8M (2.5% of revenue).
Q2 Holdings, Q1 2025: revenue $190M (+15% year over year), operating margin 1.2%, net earnings $4.8M, operating cash flow $43.5M. The chart follows the revenue to costs, profit and cash.
| Q1 2025 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $190M | +4% | +15% |
| Gross profit | $101M | +5% | +23% |
| Operating profit | $2.2M | — | — |
| Net earnings | $4.8M | 29× | — |
| Operating cash flow | $43.5M | +1% | +224% |
| Free cash flow | $37.8M | — | +528% |
What changed
Revenue was $189.7M in Q1 2025, up 15% year over year and up 4% from the previous quarter. Subscription was the largest line at 81% of revenue. Subscription added $23.9M year over year (up 18%), 99% of the total change. Services and other declined 7%.
Gross margin was 53.2%, up 3.5 points from a year earlier. Operating profit was $2.2M, a 1.2% margin (up 9.7 points year over year). Operating expenses grew 2% against revenue growth of 15%. Net earnings were $4.8M. The effective tax rate was 9.3%. Non-operating items added $3.1M, 58% of pre-tax earnings, so the bottom line overstates operating performance.
Operating cash flow was $43.5M (up 224% year over year), 916% of net earnings. Non-cash charges added back $13.7M of depreciation and amortization and $21.0M of share-based compensation. Working capital and other items added $4.0M. After capitalized software development costs ($4.9M) and purchases of property and equipment ($785K), free cash flow as the company reports it was $37.8M.
Questions
What was Q2 Holdings' revenue in the first quarter 2025?
Q2 Holdings (QTWO) reported revenue of $190M for the first quarter 2025 (Q1 2025), +15% from a year earlier and +4% from the quarter before.
Was Q2 Holdings profitable in the first quarter 2025?
Operating profit was $2.2M (1.2% of revenue) and net earnings $4.8M.
Source: Q2 Holdings 10-Q on SEC EDGAR.