Q4 2025 Q2 Holdings Inc Earnings Call Transcript
Key Points
- Q2 Holdings Inc (QTWO) reported strong year-over-year subscription revenue growth of 16% in the fourth quarter.
- The company expanded its adjusted EBITDA margins by over 400 basis points year-over-year.
- Q2 Holdings Inc (QTWO) generated meaningful free cash flow of $56.6 million in the fourth quarter.
- The fourth quarter was the second largest bookings quarter in company history, following a record third quarter.
- The company successfully executed against its profitable growth strategy, with a record backlog and solid subscription ARR growth positioning it well for 2026.
- Revenue churn for 2025 was 5.2%, up from 4.4% in 2024, reflecting an increase in overall M&A activity.
- Total non-subscription revenues increased by only 2% for the full year in 2025, indicating slower growth in this segment.
- The company expects non-subscription revenues to decline in both 2026 and beyond, impacting overall revenue growth.
- Q2 Holdings Inc (QTWO) faces challenges in managing fraud across a growing number of channels and threats, requiring faster coordination and better visibility.
- The company acknowledges that the traditional approach of relying on fragmented point solutions for fraud management is becoming increasingly complex and costly.
Good afternoon. My name is Kevin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 Holdings 4th quarter and full year 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed in today's call, please press 9 to raise your hand and 6 to unmute when called upon. I will now hand the conference over to Josh Yankovich, Investor relations. Sir, please begin.
Thank you, operator. Good afternoon, everyone, and thank you for joining us for our 4th quarter in full year 2025 conference call. With me on the call today are Matt Flake, our CEO, and Jonathan Pryce, our CFO.
This call contains forward-looking statements that are subject to significant risks and uncertainties, including, among other things, with respect to our expectations for the future operating
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