Is the business good?
How good a business is QTWO?
Q2 Holdings, Inc. earns 22% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
22%
Return on invested capital · cost of capital 9.0% · 13 points above what the capital costs: growth creates value
- Operating margin
- 8.0%
Operating margin · Software - Application median 8.2% · 12 months to Q1 2026
- Cash conversion
- 2.73×
Cash conversion · every dollar of reported profit arrived as cash, and more
- Share count, year on year
- +4.4%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | −25% |
| FY2021 | −16% |
| FY2022 | −19% |
| FY2023 | −14% |
| FY2024 | −6.1% |
| FY2025 | 5.0% |
Details›
- Gross margin12 months to Q1 2026
- 56%
- Operating margin12 months to Q1 2026
- 8.0%
- Net margin12 months to Q1 2026
- 9.0%
- Free cash flow margin
- 25%
- R&D as % of revenue
- 19%
- Revenue, trailing twelve months
- $822M
- Free cash flow, trailing twelve months
- $202M
- Net income, trailing twelve months
- $74M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 22%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Software - Application
Ranks #47 of 90 by Smart Score