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QTWO, Q2 Holdings Inc.

Software asset-light

We deliver these solutions through a unified, cloud-based software platform purpose-built for the complex, regulated financial services industry, enabling scalable and highly configurable digital financial experiences.

Q2 is a leading provider of digital solutions to financial institutions, financial technology companies, or FinTechs, and alternative finance companies, or Alt-FIs, seeking to incorporate banking into their customer engagement and servicing strategies.

Our solutions transform the ways in which financial institutions and other financial services providers engage with account holders and retail and commercial End Users.

Latest annual: FY2025 10-K

QTWO · Q2 Holdings Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$795M

+14.1% YoY · 15% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $822M 5-yr avg $636M

Gross margin 56% 5-yr avg 49%

Operating margin 8.0% 5-yr avg −9.8%

ROIC 23% 5-yr avg −4%

Owner-earnings margin 25% 5-yr avg 12%

Free cash flow margin 25% 5-yr avg 12%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Subscription (82%), Services and Other (10%) and Transactional (9%).
What moves the needle: Operating margin has run around −16% through the cycle on a 48% gross margin, the operating line in the red even at its best — so the lever is whether the spending below the gross line can come down enough to clear a profit: revenue growth against the cost curve, and the cash runway until it does. Stock-based pay runs about 12% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −10%, above 15% in 0 of 10 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Subscription is 82% of revenue, with Services and Other the other meaningful line at 10%.

Revenue by product line, FY2025

Subscription82%$649M
Services and Other10%$76M
Transactional9%$71M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$150M	$194M	$241M	$315M	$403M	$499M	$566M	$625M	$696M	$795M	$822M	RevenueRevenue
48%	49%	49%	48%	43%	45%	45%	48%	51%	54%	56%	Gross marginGross mgn
21%	19%	19%	18%	18%	16%	16%	18%	18%	16%	15%	SG&A / revenueSG&A/rev
22%	21%	21%	24%	24%	23%	23%	22%	21%	19%	19%	R&D / revenueR&D/rev
($36M)	($27M)	($32M)	($67M)	($100M)	($78M)	($105M)	($86M)	($42M)	$40M	$65M	Operating incomeOp. inc.
−23.8%	−13.9%	−13.2%	−21.2%	−24.8%	−15.6%	−18.5%	−13.8%	−6.1%	5.0%	8.0%	Operating marginOp. mgn
($36M)	($26M)	($35M)	($71M)	($138M)	($113M)	($109M)	($65M)	($39M)	$52M	$74M	Net incomeNet inc.
											Cash flow & returns
$3M	$9M	$5M	$567K	($3M)	$31M	$37M	$70M	$136M	$201M	$214M	Operating cash flowOp. cash
$12M	$15M	$17M	$28M	$52M	$55M	$62M	$72M	$69M	$53M	$51M	DepreciationDeprec.
$15M	($249K)	($6M)	$2M	$32M	$33M	$19M	($15M)	$16M	$9M	$3M	Working capital & otherWC & other
$14M	$12M	$13M	$14M	$24M	$20M	$11M	$6M	$7M	$7M	$13M	CapexCapex
9.6%	6.3%	5.5%	4.4%	5.9%	4.0%	2.0%	0.9%	1.0%	0.9%	1.5%	Capex / revenueCapex/rev
($11M)	($3M)	($9M)	($13M)	($27M)	$11M	$25M	$65M	$129M	$195M	$202M	Owner earningsOwner earn.
−7.3%	−1.5%	−3.6%	−4.2%	−6.6%	2.3%	4.5%	10.3%	18.5%	24.5%	24.5%	Owner earnings marginOE mgn
($11M)	($3M)	($9M)	($13M)	($27M)	$11M	$25M	$65M	$129M	$195M	$202M	Free cash flowFCF
−7.3%	−1.5%	−3.6%	−4.2%	−6.6%	2.3%	4.5%	10.3%	18.5%	24.5%	24.5%	Free cash flow marginFCF mgn
$95K	$4M	$131M	$506M	$0	$65M	$5M	$0	$0	—	$0	AcquisitionsAcquis.
—	—	—	—	—	—	—	$0	$0	$5M	—	BuybacksBuybacks
-62%	-44%	-11%	-7%	-10%	-8%	-9%	-10%	-7%	13%	23%	ROICROIC
-36%	-25%	-22%	-19%	-21%	-20%	-26%	-15%	-7%	8%	12%	Return on equityROE
−36%	−25%	−22%	−19%	−21%	−20%	−26%	−15%	−7%	8%	12%	Retained to equityRetained/eq
											Balance sheet
$97M	$100M	$177M	$132M	$539M	$428M	$433M	$324M	$447M	$433M	$379M	Cash & investmentsCash+inv
$12M	$13M	$20M	$22M	$36M	$47M	$47M	$43M	$42M	$52M	$74M	ReceivablesReceiv.
$4M	$8M	$9M	$11M	$8M	$11M	$10M	$19M	$9M	$20M	$10M	Accounts payablePayables
$8M	$6M	$10M	$11M	$29M	$36M	$37M	$24M	$33M	$31M	$64M	Operating working capitalOper. WC
$126M	$131M	$218M	$186M	$616M	$522M	$531M	$428M	$559M	$556M	$525M	Current assetsCur. assets
$59M	$68M	$74M	$133M	$146M	$168M	$192M	$192M	$399M	$544M	$562M	Current liabilitiesCur. liab.
2.1×	1.9×	3.0×	1.4×	4.2×	3.1×	2.8×	2.2×	1.4×	1.0×	0.9×	Current ratioCurr. ratio
$13M	$13M	$108M	$462M	$462M	$513M	$513M	$513M	$513M	$513M	$513M	GoodwillGoodwill
$201M	$213M	$464M	$1.0B	$1.4B	$1.4B	$1.3B	$1.2B	$1.3B	$1.3B	$1.2B	Total assetsAssets
—	$0	$183M	$425M	$557M	$552M	$658M	$490M	$302M	$0	$0	Total debtDebt
—	($100M)	$5M	$292M	$18M	$124M	$224M	$166M	($145M)	($433M)	($379M)	Net debt / (cash)Net debt
—	—	—	—	—	—	—	-18.6×	-8.9×	8.1×	14.0×	Interest coverageInt. cov.
$100M	$107M	$159M	$379M	$643M	$570M	$419M	$448M	$518M	$662M	$612M	Shareholders’ equityEquity
8.4%	10.8%	12.3%	12.8%	12.6%	11.2%	11.5%	12.7%	12.8%	10.9%	10.5%	Stock comp / revenueSBC/rev
											Per share
39.6M	41.2M	42.8M	46.2M	52.0M	56.4M	57.3M	58.4M	60.1M	65.1M	67.6M	Shares out (diluted)Shares
$3.79	$4.71	$5.63	$6.83	$7.74	$8.84	$9.87	$10.70	$11.59	$12.21	$12.15	Revenue / shareRev/sh
$-0.92	$-0.63	$-0.83	$-1.53	$-2.65	$-2.00	$-1.90	$-1.12	$-0.64	$0.80	$1.09	EPS (diluted)EPS
$-0.28	$-0.07	$-0.20	$-0.29	$-0.51	$0.20	$0.44	$1.11	$2.15	$2.99	$2.98	Owner earnings / shareOE/sh
$-0.28	$-0.07	$-0.20	$-0.29	$-0.51	$0.20	$0.44	$1.11	$2.15	$2.99	$2.98	Free cash flow / shareFCF/sh
$0.36	$0.30	$0.31	$0.30	$0.46	$0.35	$0.19	$0.10	$0.11	$0.10	$0.19	Cap. spending / shareCapex/sh
$2.53	$2.59	$3.71	$8.21	$12.37	$10.11	$7.31	$7.69	$8.61	$10.16	$9.04	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+13.9%/yr	+9.5%/yr
Capital spending / share	−12.9%/yr	−25.5%/yr
Book value / share	+16.7%/yr	−3.9%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Revenue+14.1%
“Revenues The following table presents our revenues for each of the periods indicated (dollars in thousands): Year Ended December 31, Change 2025 2024 $ (%) Revenues $ 794,809 $ 696,464 $ 98,345 14.1 % Revenues increased by $98.3 million, or 14.1%, from $696.5 million for the year ended December 31, 2024 to $794.8 million for the year ended December 31, 2025. This increase in revenue was primarily attributable to a $95.0 million increase in subscription revenue from the sale of additional solutions to new and existing customers and grow…”
✓ figure matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

65Mpeak FY2025

ROIC

13%low FY2016

Gross margin

54%low FY2020

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$195Mowner earningsvs.$52Mnet incomelow FY2020

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $52M of profit into $195M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$52M

Owner earnings$195M · 24% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$52M	($39M)	($65M)	($109M)	($113M)
Depreciation & amortizationnon-cash charge added back	+$53M	+$69M	+$72M	+$62M	+$55M
Stock-based compensationreal costnon-cash, but a real cost	+$87M	+$89M	+$79M	+$65M	+$56M
Working capital & othertiming of cash in and out, other non-cash items	+$9M	+$16M	−$15M	+$19M	+$33M
Cash from operations	$201M	$136M	$70M	$37M	$31M
Capital expenditurecash put back in to keep running and to grow	−$7M	−$7M	−$6M	−$11M	−$20M
Owner earnings	$195M	$129M	$65M	$25M	$11M
Owner-earnings marginowner earnings ÷ revenue	24%	19%	10%	4%	2%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $87M), owner earnings is nearer $108M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 8.1×

Comfortable

Operating income $40M ÷ interest expense $5M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? +$433M

Net cash, debt-free

Cash $368M + ST investments $65M − debt $0

What this means
Cash and short-term investments exceed every dollar of debt by $433M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 3d

Tight

DSO 24 + DIO 0 − DPO 20 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital -10%

Below average through the cycle

10-yr median, range -62%–13%; 13% latest = NOPAT $38M ÷ invested capital $294M

Industry peers: median -21%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 13% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 24%

High, recently turned positive

latest $195M = operating cash $201M − maintenance capex $7M; positive each of the last 3 years, after an earlier loss stretch (10-yr median -1%)

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 24% of revenue this year, a -1% median across 10 years. Treating stock comp as the real expense it is (less $87M of SBC) leaves $108M.
Are earnings backed by cash? 3.87×

Cash-backed

Cash from ops $201M ÷ net income $52M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 3%

Reinvests most of it

Dividends + buybacks $5M ÷ Owner Earnings $195M

What this means
Of $195M Owner Earnings, $5M (3%) went back to shareholders, $0 dividends, $5M buybacks. But the buybacks barely exceed stock issued to employees ($87M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.13×

Harvesting

Capex $7M ÷ depreciation $53M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $795M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.02×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $0 vs $12M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 9 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.28/share (latest year $0.83), the averaged base the calculator's gate runs on, and book value is $10.57/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 1 of 10

What this means
Lost money in 9 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 9 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −17% → −5% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin widened — about −17% early to −5% lately, median −16% — pricing power intact or improving.
Reinvestment, incremental ROIC 2%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Worst year 2020 · −24.8% op. margin

What this means
Operations went underwater in 2020, understand why before trusting the good years.
Share count +5.7%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“AI-enabled offerings may reduce demand for our products and services, compress pricing, weaken customer relationships or shift value creation away from regulated financial institutions toward technology providers.”

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$525M

Cash & short-term investments$379M
Receivables$74M
Other current assets$71M

Current liabilities$562M

Accounts payable$10M
Other current liabilities$552M

Current ratio0.93×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.93×stricter: inventory excluded

Cash ratio0.67×strictest: cash alone against what's due

Working capital($38M)the cushion left after near-term bills

Revenue, latest quarter vs. a year ago+14.1%the freshest read on whether the business is still growing

Current ratio, recent quarters2.4× → 0.9×

Deeper floors

Tangible book value$23Mequity stripped of goodwill & intangibles

Net current asset value($110M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$40M$40M of it operating leases

Deferred revenue$227Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $490M of operating cash; how management split it reads as a cash builder, a large share of cash simply built up on the balance sheet.

Reinvested$128M · 26%
Buybacks$5M · 1%
Retained (debt / cash)$358M · 73%

Returned to owners$5M
1% of the owner earnings the business produced over the span, $0 as dividends and $5M as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose $282M.
Average price paid for buybacks$72.46
Across the years where the filing reports a share count, 0M shares were bought for $5M, about $72.46 each.
Net change in share count70.6%
The diluted count rose from 40M to 68M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$591M46% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity77%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$710Mover 10 years buying other businesses, against $128M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Matthew P. Flake	$7.9M	−$5.7M	$11M
2022	Matthew P. Flake	$8.1M	−$2.1M	$25M
2023	Matthew P. Flake	$11.4M	$18.1M	$65M
2024	Matthew P. Flake	$12.1M	$65.6M	$129M
2025	Matthew P. Flake	$11.5M	−$10.4M	$195M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio95:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$87M
The slice of the business handed to employees in shares this year, 11% of revenue, equal to 218% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Q2 Holdings Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereDid the share count rise anyway?70.6%
Diluted shares grew 70.6% over 2016–2025, even as the company spent $5M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Acquisitions, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
RPDRapid7	$860M	70%	-17.1%	-18%	6%
CXMSprinklr Inc.	$857M	70%	-6.6%	-3%	5%
FRSHFreshworks Inc.	$839M	81%	-22.5%	-23%	11%
QTWOQ2 Holdings Inc.	$795M	48%	-14.8%	-10%	0%
ASANAsana	$791M	89%	-68.9%	-177%	-27%
COURCoursera Inc.	$758M	53%	-22.9%	—	0%
BANDBandwidth Inc.	$754M	44%	-2.3%	-2%	5%
BRZEBraze	$738M	67%	-30.7%	-30%	-5%
Group median	—	69%	-19.8%	-18%	3%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Q2 Holdings Inc. has delivered.

Q2 Holdings Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Q2 Holdings Inc. earns about $3M on its 0.4% median owner-earnings margin. This year’s 24.5% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($3M) Net of stock comp (−$86M) Steady-state · maintenance capex ($207M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+72%/yr

Owner-earnings growth · since FY2021+104%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $202M on 63M shares outstanding, per the 10-Q cover, as of 2026-04-29; net cash $379M. The if-converted diluted count is 68M, 8% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($13M) runs well above depreciation ($51M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $207M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh QTWO against another business →

The owners of QTWO: the meeting and the votes →

Cite: Owner Scorecard, "Q2 Holdings Inc. (QTWO), the owner's record," https://ownerscorecard.com/c/QTWO, data as of 2026-07-09.

Manual order: ← QSR its page in the Manual QUAD →

Industry order: ← QLYS the Software chapter QUBT →