Filing Flows › Q2 Holdings (QTWO) › Q1 2026
Q2 Holdings (QTWO) Q1 2026 earnings results (first quarter 2026)
10-Q filed Apr 29, 2026
Q2 Holdings (QTWO) reported revenue of $217M for the first quarter 2026 (Q1 2026), +14% from a year earlier and +4% from the quarter before. Operating margin was 12.8%, net earnings $26.6M (12.3% of revenue).
Q2 Holdings, Q1 2026: revenue $217M (+14% year over year), operating margin 12.8%, net earnings $26.6M, operating cash flow $56.3M. The chart follows the revenue to costs, profit and cash.
| Q1 2026 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $217M | +4% | +14% |
| Gross profit | $128M | +11% | +27% |
| Operating profit | $27.7M | +64% | 13× |
| Net earnings | $26.6M | +30% | +460% |
| Operating cash flow | $56.3M | -12% | +29% |
| Free cash flow | $44.2M | — | — |
What changed
Revenue was $216.5M in Q1 2026, up 14% year over year and up 4% from the previous quarter. Subscription was the largest line at 83% of revenue. Subscription added $25.6M year over year (up 17%), 96% of the total change. Transactional declined 4%.
Gross margin was 59.1%, up 5.9 points from Q1 2025. Operating profit was $27.7M, a 12.8% margin (up 11.6 points year over year). Of the extra revenue versus Q1 2025, 95% reached operating profit, above the 1% margin then. Operating expenses grew 1% against revenue growth of 14%. The fastest-growing cost line was Research & development (+11%). Net earnings were $26.6M, up 460% year over year. The effective tax rate was 10.5%.
Operating cash flow was $56.3M (up 29% year over year), 211% of net earnings. Non-cash charges added back $11.7M of depreciation and amortization and $20.3M of share-based compensation. After purchases of property and equipment ($6.6M) and capitalized software development costs ($5.5M), free cash flow as the company reports it was $44.2M.
Questions
What was Q2 Holdings' revenue in the first quarter 2026?
Q2 Holdings (QTWO) reported revenue of $217M for the first quarter 2026 (Q1 2026), +14% from a year earlier and +4% from the quarter before.
Was Q2 Holdings profitable in the first quarter 2026?
Operating profit was $27.7M (12.8% of revenue) and net earnings $26.6M.
Source: Q2 Holdings 10-Q on SEC EDGAR.