Q2 Holdings Cash Falls To $116.3 Million After Note Repayment And Faster Buybacks
The digital banking software maker has spent $158.9 million on buybacks this year, and its board added $350.0 million to the program in July.
Q2 Holdings, which sells cloud-based digital banking software to banks, credit unions and fintechs, ended September with $116.3 million in cash, down from $367.6 million at year-end, after repaying its convertible notes and buying back stock at a quickening pace, its 10-Q shows.
Notes repaid, shares retired
In the first nine months of 2026, Q2 spent $158.9 million repurchasing 2,900 thousand shares and paid $304.0 million to retire its 0.75% convertible notes. Cash and cash equivalents fell about $251 million over the period, the company's cash-flow statement shows.
The buyback is speeding up. Q2 bought $38.8 million of stock (633 thousand shares) in the third quarter, against $22.9 million for 502 thousand shares in the second. The first $150.0 million authorization was used up by September 30.
In July the board authorized another $350.0 million. At September 30, $336.1 million of the combined authorizations remained, versus $24.9 million at June 30. The program has no expiration date, and the board can modify, suspend or end it at any time.
A smaller share count flatters EPS
Diluted earnings per share were $0.52 in the third quarter, against $0.23 a year earlier. Net income rose to $33.2 million from $15.0 million, but the diluted share count also fell to 63,529 thousand from 69,858 thousand, so part of the per-share gain comes from fewer shares.
Revenue rose to $225.8 million, up 12% from a year earlier, according to the company's earnings release. Q2 also raised its full-year 2026 guidance to $888.0 million to $892.0 million in revenue.
Receivables climb, interest income shrinks
Accounts receivable reached $94.0 million, up from $51.7 million at year-end. Operating cash flow for the nine months was $181.7 million, including a $42.6 million outflow from the receivables increase, which the filing attributes to the timing and collection of billings.
The repaid notes also cost the company interest income. Other income, net fell to $373 thousand in the third quarter from $4.2 million a year earlier, as lower cash balances cut interest income by $4.6 million.
Management says cash flow from operations and a $125.0 million revolving credit line, with no borrowings outstanding, cover its needs for the next twelve months, including repurchases under the program.
A new co-CEO
Alongside results, Q2 said in an 8-K that CFO Jonathan Price becomes co-CEO effective October 29, serving with Matt Flake, who stays president and chairman. Price joins the board and remains CFO while the company searches for a successor.
Q2's 10-Q puts $336.1 million still available for repurchases at September 30, against $116.3 million in cash.
Sources
- 10-Q Filing — Q2 Holdings (QTWO) — SEC EDGAR
- 10-Q Filing — Q2 Holdings (QTWO), Q2 FY2026 filed 2026-07-29 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, a260930q2ex9918k.htm) — Q2 Holdings, filed 2026-10-28 — SEC EDGAR
- 8-K Filing — Q2 Holdings, filed 2026-10-28 (Items 5.02, 7.01, 9.01) — SEC EDGAR
- Q2 Holdings: Q3 Earnings Snapshot | 9news.com — Associated Press
- Q2 Holdings (QTWO) vs. PYPL and NCNO: Can AI-Powered Banking Infrastructure Unlock Its Next Growth Phase? — Yahoo Finance
- Q2 Holdings Non-GAAP EPS of $0.74 beats by $0.04, revenue of $225.77M beats by $4.51M (NYSE:QTWO) — seekingalpha.com
- Q2 Holdings names Jonathan Price as co-CEO (QTWO:NYSE) | Seeking Alpha — seekingalpha.com
- Q2 Holdings (QTWO) Stock May Be 40% Undervalued As AI Banking Focus Grows — Yahoo Finance
