Q2 (QTWO) investor relations material

Business model and market opportunity

• Positioned for strong subscription revenue growth and margin expansion, with a large and expanding total addressable market (TAM) of over $23 billion across digital banking, risk and fraud, digital lending, and embedded finance platforms.

• Over 1,200 customers with average contract lengths exceeding 10 years and a 14% year-over-year growth in subscription annualized recurring revenue (ARR).

• Balanced go-to-market approach with significant cross-sell opportunities and a $3 billion cross-sell potential within the existing customer base.

• Commercial solutions deepen market presence, with average ARR at signing for commercial deals exceeding $1 million and over 90 enterprise and Tier 1 customers.

Technology and platform differentiation

• Single digital banking platform serves retail, SMB, and commercial clients, complemented by lending, fraud, and risk management solutions.

• Q2 Innovation Studio and Helix enable embedded fintech and banking-as-a-service, supporting over 200 technology partners and 2,200 external developers.

• AI and intelligent orchestration leverage real-time behavioral and transactional context, providing a structural advantage for AI deployment at scale.

• Over 1,000 unique digital banking integrations and a robust embedded fintech ecosystem enhance extensibility and data insights.

Financial performance and outlook

• FY 2026 revenue guidance at $879 million and adjusted EBITDA at $240 million, with a targeted non-GAAP gross margin of over 60%.

• Subscription ARR growth of 14% year-over-year and average customer contracted revenue growth of 61% at 48 months post-implementation.

• Free cash flow for Q1 2026 was $44.2 million, up from $37.8 million in Q1 2025.

• Financial framework targets by FY 2030 include ~65% non-GAAP gross margin and ~35% adjusted EBITDA margin.