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.)

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.
 

Cryptocurrency-related content is intended solely as news and market commentary. Crypto Derivatives are not available to Retail clients registered with Capital Com (UK) Ltd.