Q2 (US:QTWO)2026-02-11 21:19Financial Performance - Fourth quarter revenue reached $208.2 million, a 14% increase year-over-year, and full-year revenue totaled $794.8 million, also up 14% year-over-year[7] - GAAP net income for the fourth quarter was $20.4 million, compared to $0.2 million in the prior-year quarter, and full-year GAAP net income was $52.0 million, reversing a loss of $38.5 million in 2024[7] - Adjusted EBITDA for the fourth quarter was $51.2 million, up from $37.6 million in the prior-year quarter, with full-year adjusted EBITDA of $186.5 million, an increase from $125.3 million in 2024[7] - Net income for the twelve months ended December 31, 2025, was $52,008, compared to a net loss of $(38,536) in 2024[34] - Total revenues for the twelve months ended December 31, 2025, increased to $794,809, up from $696,464 in 2024, representing a growth of 14.1%[35] - Non-GAAP gross profit for the twelve months ended December 31, 2025, was $461,095, compared to $390,207 in 2024, reflecting a year-over-year increase of 18.2%[35] - Free cash flow for the twelve months ended December 31, 2025, was $173,368, significantly higher than $106,720 in 2024, marking a growth of 62.4%[37] - GAAP gross margin improved to 54.1% for the twelve months ended December 31, 2025, compared to 50.9% in 2024[35] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $186,514, up from $125,338 in 2024, indicating a growth of 48.9%[35] - Net cash provided by operating activities for the twelve months ended December 31, 2025, was $201,461, compared to $135,751 in 2024, an increase of 48.4%[34] - Non-GAAP operating income for the twelve months ended December 31, 2025, was $154,382, compared to $95,464 in 2024, reflecting a year-over-year increase of 61.8%[35] Subscription and Revenue Growth - Subscription Annualized Recurring Revenue increased to $780.1 million, reflecting a 14% year-over-year growth[8] - The company signed eight Enterprise and Tier 1 contracts in the quarter, including agreements with a Tier 1 bank and a $40 billion bank for various digital banking solutions[8] - For Q1 2026, the company expects total revenue between $212.5 million and $216.5 million, indicating year-over-year growth of 12% to 14%[20] - Full-year 2026 revenue guidance is set between $871.0 million and $878.0 million, representing a 10% year-over-year growth[20] - The company anticipates adjusted EBITDA for 2026 to be between $225.0 million and $230.0 million, which would be approximately 26% of revenue[20] - Initial expectations for 2027 include subscription revenue growth of approximately 12.5% to 13% and adjusted EBITDA margin expansion of 150 to 200 basis points[20] - Subscription revenue reached $170.7 million in Q4 2025, up 16.4% from $146.6 million in Q4 2024[32] Operational Metrics - Remaining Performance Obligations (Backlog) grew by $175 million sequentially and $472 million year-over-year, totaling approximately $2.7 billion at quarter-end, representing 7% sequential growth and 21% year-over-year growth[8] - The company's gross profit for Q4 2025 was $115.3 million, compared to $96.3 million in Q4 2024, reflecting a gross margin improvement[32] - Current liabilities increased to $544.1 million in Q4 2025 from $398.9 million in Q4 2024, primarily due to higher accounts payable and accrued liabilities[30] - The company’s accumulated deficit decreased to $612.2 million as of December 31, 2025, from $664.2 million a year earlier[30] - Operating expenses for Q4 2025 were $98.4 million, a marginal increase from $97.9 million in Q4 2024[32] Strategic Focus - The company anticipates continued growth in subscription services and plans to enhance its AI-based solutions in the upcoming quarters[28] - Q2 Holdings is focused on expanding its market presence and improving its sales and marketing capabilities to drive future revenue growth[28] - The company repurchased $5,000 in common shares during the financing activities for the twelve months ended December 31, 2025[34]