--- title: "Q2 Holdings, Inc. Announces First Quarter 2026 Financial Results" type: "News" locale: "en" url: "https://longbridge.com/en/news/284637693.md" description: "Q2 Holdings, Inc. reported strong financial results for Q1 2026, with revenue of $216.5 million, a 14% increase year-over-year. GAAP net income rose to $26.6 million, up from $4.8 million in the prior year. The company signed nine significant contracts, including the largest fraud deal in its history. Subscription ARR increased to $802.3 million, and backlog grew to approximately $2.7 billion. Q2 is advancing its AI strategy to enhance digital banking and fraud prevention capabilities, positioning itself for continued growth and profitability in 2026." datetime: "2026-04-29T20:15:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284637693.md) - [en](https://longbridge.com/en/news/284637693.md) - [zh-HK](https://longbridge.com/zh-HK/news/284637693.md) --- # Q2 Holdings, Inc. Announces First Quarter 2026 Financial Results AUSTIN, Texas--(BUSINESS WIRE)-- Q2 Holdings, Inc ( QTWO ). , a leading provider of digital transformation solutions for financial services, today announced results for its first quarter ending March 31, 2026. **GAAP Results for the First Quarter 2026** - Revenue of $216.5 million, up by 14 percent compared to the prior-year quarter and 4 percent from fourth quarter 2025. - GAAP gross margin of 59.1 percent, up from 53.2 percent in the prior-year quarter and 55.4 percent in fourth quarter 2025. - GAAP net income of $26.6 million, up from $4.8 million for the prior-year quarter and $20.4 million for fourth quarter 2025. **Non-GAAP Results for the First Quarter 2026** - Non-GAAP gross margin of 62.1 percent, up from 57.9 percent for the prior-year quarter and 58.6 percent in fourth quarter 2025. - Adjusted EBITDA of $60.0 million, up from $40.7 million for the prior-year quarter and $51.2 million for fourth quarter 2025. For a reconciliation of our GAAP to non-GAAP results, please see the tables below. “We delivered a strong start to 2026, with performance reflecting continued execution across our key priorities and the durability of our model,” said Matt Flake, Chairman, President and CEO, Q2. "We saw record bookings for a first quarter, highlighted by strength at the high end of the market and a balanced mix of net new and expansion activity. We also saw continued momentum across our digital banking platform and risk and fraud solutions, which remain critical areas of investment for our customers. With a strong pipeline and continued innovation across areas like AI, we remain confident in our ability to execute and deliver long-term value.” **First Quarter Highlights** - Signed nine Enterprise and Tier 1 contracts in the quarter highlighted by: - A significant expansion agreement through the merger of Synovus and Pinnacle Financial Partners with the combined entity utilizing our commercial digital banking and commercial fraud management solutions. - The largest fraud deal signed in company history with an Enterprise bank. - Net new and expansion agreements with two other Enterprise banks to utilize our fraud solutions. - Subscription Annualized Recurring Revenue increased to $802.3 million, up 14 percent year-over-year. - Remaining Performance Obligations total, or Backlog, increased by $46 million sequentially and $444 million year-over-year, resulting in a total committed Backlog of approximately $2.7 billion at quarter-end, representing 2 percent sequential growth and 19 percent year-over-year growth. - In the first quarter ended March 31, 2026, Q2 repurchased approximately 1.8 million shares of the Company's outstanding common stock at an average share price of approximately $55.04 for total consideration of approximately $97.2 million. As of the end of the quarter, Q2 had $47.8 million remaining on its $150 million share repurchase authorization announced in November 2025. **Q2 Delivers Record First Quarter Bookings and Advances AI Strategy to Start 2026** Q2 delivered a strong start to 2026, with performance reflecting continued execution across the business and meaningful progress in its AI strategy. The quarter was supported by broad-based demand across Q2’s platform, particularly within digital banking and risk and fraud solutions, as financial institutions continue to prioritize technology investment, operational efficiency, and real-time risk management. Q2 also continues to advance its AI strategy as a natural extension of its platform. Positioned at the center of digital banking interactions, Q2 serves as a “System of Context,” providing real-time visibility into user behavior, transaction activity, and decision-making across retail, small business, and commercial banking. At the same time, Q2 operates at the execution layer of banking, orchestrating workflows and enabling transactions and outcomes across the platform. This combination of context and execution allows Q2 to embed AI directly into the flow of banking activity—enabling real-time action in a secure and compliant manner. Q2 is focused on applying AI across key areas including banker efficiency, fraud prevention, and personalization, where it is already delivering new capabilities. As financial institutions continue to adopt AI, Q2 believes its platform is well positioned to serve as a foundation for innovation. “We delivered strong financial performance in the first quarter, with solid year-over-year revenue growth and meaningful expansion in profitability,” said Jonathan Price, CFO, Q2. “Adjusted EBITDA grew and margins expanded significantly, reflecting continued progress in scaling the business and driving operating efficiency. We believe these results reflect the strength of our business model and position us well to continue delivering balanced growth and profitability while prioritizing effective capital allocation in 2026.” **Financial Outlook** As of April 29, 2026, Q2 Holdings ( QTWO ) is providing guidance for its second 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 ( QTWO ) is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Q2 Holdings ( QTWO ) 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 ( QTWO ) is providing guidance for the second quarter of 2026 as follows: - Total revenue of $214.0 million to $218.0 million, which would represent year-over-year growth of 10 to 12 percent. - Adjusted EBITDA of $57.5 million to $60.5 million, representing 27 to 28 percent of revenue for the quarter. Q2 Holdings ( QTWO ) is providing updated guidance for the full-year 2026 as follows: - Total revenue of $875.0 million to $882.0 million, which would represent year-over-year growth of 10 to 11 percent. - Adjusted EBITDA of $237.0 million to $242.0 million, representing 27 percent of revenue for the year. **Conference Call Details** **Date:** Wednesday, April 29, 2026 **Time:** 5:00 p.m. EDT **Hosts:** Matt Flake, Chairman, President & CEO / Jonathan Price, CFO **Webcast Registration:** https://events.q4inc.com/attendee/991079750 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. ( QTWO )** 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 February 11, 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: continued execution across our key priorities; the durability of our model; continued momentum across our digital banking platform and risk and fraud solutions; critical areas of investment for our customers; our strong pipeline; continued innovation across areas like AI; our confidence and ability to execute and deliver long-term value; our momentum and advancement of our AI strategy; our AI strategy, capabilities and product offerings; the positioning of Q2’s platform to serve as a foundation for innovation; the strength of our business model and our ability to continue delivering balanced growth and profitability while prioritizing effective capital allocation in 2026; 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 recent 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 to identify, develop and exploit vulnerabilities, automate certain aspects of cyberattacks and conduct more targeted or scalable social engineering or fraud schemes; (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 and changes to regulation or 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 migration of the computing, storage and processing of our digital banking platform solutions from our third-party data centers to third-party public cloud service providers; (p) the difficulties and risks associated with developing and selling complex new solutions and enhancements, including those using AI with the technical and regulatory specifications and functionality required by our customers and relevant governmental authorities; (q) the risks associated with operating within and selling into a regulated industry, including risks related to 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 risk that we will not be able to maintain historical contract terms such as pricing and duration; (u) the general risks associated with the complexity of our customer arrangements and our solutions; (v) the risks associated with integrating acquired companies and successfully selling and maintaining their solutions; (w) 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; (x) litigation related to intellectual property and other matters and any related claims, negotiations and settlements; (y) the risks associated with further consolidation in the financial services industry; (z) the risks associated with selling our solutions internationally and with the continued expansion of our international operations; and (aa) the risk that our debt repayment obligations may adversely affect our financial condition and 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. **Q2 Holdings, Inc. ( QTWO )** **Condensed Consolidated Balance Sheets** (in thousands) (unaudited) **March 31, 2026** **December 31, 2025** **Assets** Current assets: Cash and cash equivalents $ 342,332 $ 367,631 Restricted cash 2,057 1,672 Investments 36,559 65,064 Accounts receivable, net 74,196 51,716 Contract assets, current portion, net 7,356 8,596 Prepaid expenses and other current assets 21,963 28,234 Deferred solution and other costs, current portion 29,535 22,631 Deferred implementation costs, current portion 10,575 10,508 Total current assets 524,573 556,052 Property and equipment, net 27,933 27,783 Right of use assets 25,768 27,188 Deferred solution and other costs, net of current portion 29,961 27,827 Deferred implementation costs, net of current portion 31,235 28,929 Intangible assets, net 75,781 78,377 Goodwill 512,869 512,869 Contract assets, net of current portion and allowance 15,138 14,103 Other long-term assets 3,089 3,149 Total assets $ 1,246,347 $ 1,276,277 **Liabilities and stockholders' equity** Current liabilities: Accounts payable and accrued liabilities $ 53,416 $ 76,799 Convertible notes, current portion 303,682 303,368 Deferred revenues, current portion 196,762 155,003 Lease liabilities, current portion 8,628 8,915 Total current liabilities 562,488 544,085 Deferred revenues, net of current portion 30,557 26,826 Lease liabilities, net of current portion 31,592 33,832 Other long-term liabilities 10,034 9,723 Total liabilities 634,671 614,466 Stockholders' equity: Common stock 6 6 Additional paid-in capital 1,199,888 1,275,980 Accumulated other comprehensive loss (2,635 ) (1,953 ) Accumulated deficit (585,583 ) (612,222 ) Total stockholders' equity 611,676 661,811 Total liabilities and stockholders' equity $ 1,246,347 $ 1,276,277 **Q2 Holdings, Inc. ( QTWO )** **Condensed Consolidated Statements Of Comprehensive Income** (in thousands, except per share data) (unaudited) **Three Months Ended March 31,** **2026** **2025** Revenues (1) $ 216,506 $ 189,735 Cost of revenues (2) 88,592 88,745 Gross profit 127,914 100,990 Operating expenses: Sales and marketing 25,720 26,527 Research and development 41,880 37,853 General and administrative 32,187 32,322 Transaction-related costs 250 — Amortization of acquired intangibles — 93 Lease and other restructuring charges 188 2,006 Total operating expenses 100,225 98,801 Income from operations 27,689 2,189 Total other income, net 2,064 3,051 Income before income taxes 29,753 5,240 Provision for income taxes (3,114 ) (487 ) Net income $ 26,639 $ 4,753 Other comprehensive income (loss): Unrealized loss on available-for-sale investments (60 ) (24 ) Foreign currency translation adjustment (622 ) 177 Comprehensive income $ 25,957 $ 4,906 Net income per common share Basic $ 0.43 $ 0.08 Diluted $ 0.40 $ 0.07 Weighted average common shares outstanding Basic 62,338 61,222 Diluted 67,647 64,820 (1) The following table disaggregates the Company's revenue by major source: **Three Months Ended March 31,** **2026** **2025** Subscription $ 179,886 $ 154,289 Transactional 17,808 18,617 Services and Other 18,812 16,829 Total Revenues $ 216,506 $ 189,735 (2) Includes amortization of acquired technology of $4.3 million and $5.5 million for the three months ended March 31, 2026 and 2025, respectively. **Q2 Holdings, Inc. ( QTWO )** **Condensed Consolidated Statements of Cash Flows** (in thousands) (unaudited) **Three Months Ended March 31,** **2026** **2025** **Cash flows from operating activities:** Net income $ 26,639 $ 4,753 Adjustments to reconcile net income to net cash from operating activities: Amortization of deferred implementation, solution and other costs 7,748 6,961 Depreciation and amortization 11,743 13,720 Amortization of debt issuance costs 360 543 Amortization of premiums and discounts on investments (42 ) (301 ) Stock-based compensation expense 20,265 21,010 Deferred income taxes 343 (2,042 ) Other non-cash items 261 465 Changes in operating assets and liabilities: (10,996 ) (1,578 ) Net cash provided by operating activities 56,321 43,531 **Cash flows from investing activities:** Net maturities (purchases) of investments 28,487 (13,805 ) Purchases of property and equipment (6,597 ) (785 ) Capitalized software development costs (5,514 ) (4,914 ) Net cash provided by (used in) investing activities 16,376 (19,504 ) **Cash flows from financing activities:** Repurchases of common shares (97,153 ) — Proceeds from exercise of stock options and ESPP — 547 Net cash provided by (used in) financing activities (97,153 ) 547 Effect of exchange rate changes on cash, cash equivalents and restricted cash (458 ) 110 Net increase (decrease) in cash, cash equivalents and restricted cash (24,914 ) 24,684 Cash, cash equivalents and restricted cash, beginning of period 369,303 360,793 Cash, cash equivalents and restricted cash, end of period $ 344,389 $ 385,477 **Q2 Holdings, Inc. ( QTWO )** **Reconciliation of GAAP to Non-GAAP Measures** (in thousands) (unaudited) **Three Months Ended March 31,** **2026** **2025** GAAP gross profit $ 127,914 $ 100,990 Stock-based compensation 2,187 3,218 Amortization of acquired technology 4,349 5,505 Lease and other restructuring charges — 144 Non-GAAP gross profit $ 134,450 $ 109,857 Revenues $ 216,506 $ 189,735 GAAP gross margin 59.1 % 53.2 % Non-GAAP gross margin 62.1 % 57.9 % GAAP sales and marketing expense $ 25,720 $ 26,527 Stock-based compensation (2,544 ) (3,452 ) Non-GAAP sales and marketing expense $ 23,176 $ 23,075 GAAP research and development expense $ 41,880 $ 37,853 Stock-based compensation (4,146 ) (4,042 ) Non-GAAP research and development expense $ 37,734 $ 33,811 GAAP general and administrative expense $ 32,187 $ 32,322 Stock-based compensation (11,388 ) (10,298 ) Non-recurring legal settlements — (1,750 ) Non-GAAP general and administrative expense $ 20,799 $ 20,274 GAAP operating income $ 27,689 $ 2,189 Stock-based compensation 20,265 21,010 Transaction-related costs 250 — Amortization of acquired technology 4,349 5,505 Amortization of acquired intangibles — 93 Lease and other restructuring charges 188 2,150 Non-recurring legal settlements — 1,750 Non-GAAP operating income $ 52,741 $ 32,697 GAAP net income $ 26,639 $ 4,753 Stock-based compensation 20,265 21,010 Transaction-related costs 250 — Amortization of acquired technology 4,349 5,505 Amortization of acquired intangibles — 93 Lease and other restructuring charges 188 2,150 Non-recurring legal settlements — 1,750 Amortization of debt issuance costs 360 683 Tax adjustment (10,384 ) (8,481 ) Non-GAAP net income $ 41,667 $ 27,463 Weighted average common shares outstanding, diluted 67,647 64,820 GAAP net income per common share, diluted $ 0.40 $ 0.07 Non-GAAP, net income per common share, diluted $ 0.63 $ 0.42 Reconciliation of GAAP net income to adjusted EBITDA: GAAP net income $ 26,639 $ 4,753 Stock-based compensation 20,265 21,010 Transaction-related costs 250 — Depreciation and amortization 11,743 13,720 Lease and other restructuring charges 188 2,150 Non-recurring legal settlements — 1,750 Provision for income taxes 3,114 487 Interest and other income, net (2,167 ) (3,160 ) Adjusted EBITDA $ 60,032 $ 40,710 Adjusted EBITDA margin 27.7 % 21.5 % **Q2 Holdings, Inc. ( QTWO )** **Reconciliation of Free Cash Flow** (in thousands) (unaudited) **Three Months Ended March 31,** **2026** **2025** Net cash provided by operating activities $ 56,321 $ 43,531 Purchases of property and equipment (6,597 ) (785 ) Capitalized software development costs (5,514 ) (4,914 ) Free cash flow $ 44,210 $ 37,832 View source version on businesswire.com: https://www.businesswire.com/news/home/20260429142824/en/ Source: Q2 Holdings, Inc. 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