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Q2 Holdings Q3 adjusted EBITDA beats analyst expectations on margin expansion

By Reuters News


Overview

  • Digital banking solutions provider's Q3 revenue rose 12% yr/yr

  • Q3 adjusted EBITDA beat analyst expectations

  • Company repurchased $38.8 mln of shares in Q3


Outlook

  • Q2 Holdings 2026 revenue guidance of $888 mln-$892 mln

  • Company sees 2026 adjusted EBITDA at $253 mln-$256 mln

  • Q2 Holdings expects Q4 revenue of $226 mln-$230 mln and adjusted EBITDA of $62.4 mln-$65.4 mln


Result Drivers

  • DIGITAL BANKING BOOKINGS - Co said solid bookings in digital banking, including multiple Tier 1 contracts with credit unions and banks, contributed to Q3 results

  • AI-DRIVEN FRAUD SOLUTIONS - Early demand for new AI-driven fraud solution was strong, with early-adopter sign-ups about double initial expectations

  • MARGIN EXPANSION - Record gross margin and adjusted EBITDA margin reflected continued scalability of business model, per CFO Jonathan Price


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

$225.80 mln

Q3 Net Income

$33.20 mln

Q3 Adjusted EBITDA

Beat

$67.76 mln

$60.78 mln (13 Analysts)

Q3 Gross Margin

59.70%

Q3 Adjusted Gross Margin

62.60%


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the software peer group is "buy"

  • Wall Street's median 12-month price target for Q2 Holdings Inc is $75.00, about 10.1% above its October 27 closing price of $68.13

  • The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 16 three months ago


Reuters Recommended Reads

  • Oct 27 - Manhattan Associates Q3 revenue beats estimates on cloud subscription growth

  • Oct 27 - Intapp Q1 profit beats estimates on subscription growth

  • Oct 27 - Commvault Systems Q2 subscription revenue rises on SaaS growth


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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