These interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements for interim financial statements. The interim unaudited condensed consolidated financial statements include the accounts of Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

In the Company's opinion, the interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2025, which are included in the Company's Annual Report on Form 10-K, or Form 10-K, filed with the SEC on February 11, 2026. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other period.

The preparation of the interim unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the interim unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include: revenue recognition; estimate of credit losses; fair value of certain stock awards issued; the carrying value of goodwill; the useful lives of property and equipment and long-lived intangible assets; the impairment assessment of long-lived assets; and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments, accounts receivable and contract assets. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a majority of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. No individual customer accounted for 10% or more of revenues for the three and six months ended June 30, 2026 and 2025. No customer accounted for 10% or more of accounts receivable, net as of June 30, 2026 and December 31, 2025.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Basic net income per share
Numerator:
Net income	$	29,858	$	11,764	$	56,497	$	16,517
Denominator:
Weighted-average common shares outstanding, basic	62,486		62,353		62,412		61,790
Net income per common share, basic	$	0.48	$	0.19	$	0.91	$	0.27

Diluted net income per share
Numerator:
Net income	$	29,858	$	11,764	$	56,497	$	16,517
Interest expense, net of tax(1)	521		845		1,184		—
Adjusted net income used in diluted computations	$	30,379	$	12,609	$	57,681	$	16,517
Denominator:
Weighted-average common shares outstanding, basic	62,486		62,353		62,412		61,790
Effect of potentially dilutive shares:
Stock options, restricted stock units, market stock units and performance stock units	703		2,493		1,419		3,171
Shares issuable pursuant to the ESPP	7		3		11		2
Shares related to convertible notes(2)	2,224		4,793		2,824		—
Weighted-average common shares outstanding, diluted	65,420		69,642		66,666		64,963
Net income per common share, diluted	$	0.46	$	0.18	$	0.87	$	0.25

(2) The convertible senior notes issued by the Company could have been converted into the Company’s common stock, subject to certain contingencies. The 2026 convertible notes were settled during the three months ended June 30, 2026 and are no longer outstanding. See Note 9—Debt for additional information. The if-converted method is used for diluted net income per share calculation of our convertible notes.


	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Stock options, restricted stock units, market stock units and performance stock units	1,759	616	646	449
Shares issuable pursuant to the ESPP	26	15	5	7
Shares related to convertible notes	—	—	—	4,793
Anti-dilutive shares excluded from diluted net income per common share	1,785	631	651	5,249

In September 2025, the Financial Accounting Standards Board, or FASB, issued ASU No. 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." The amendments are intended to reduce diversity in practice and provide clearer criteria for determining which implementation and development costs should be capitalized versus expensed. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Entities may apply a prospective transition approach, a modified transition approach, or a retrospective transition approach. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" which provides targeted improvements to the guidance for measuring expected credit losses. The amendments are intended to enhance consistency in application and clarify the treatment of certain financial assets within the scope of Topic 326. The ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods, on a prospective basis. The Company adopted the new guidance effective January 1, 2026 on a prospective basis and elected the practical expedient to estimate expected credit losses based on actual uncollected amounts. There was no material impact to the Company's consolidated financial statements as of the adoption date.

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" which requires public companies to disclose additional information about certain costs and expenses in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statement disclosures.