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Investing.com - Needham raised its price target on Q2 Holdings (NYSE:QTWO) to $115.00 from $110.00 on Thursday, while maintaining a Buy rating following the company’s second-quarter earnings report. According to InvestingPro data, the company, currently valued at $5.6 billion, is trading at premium multiples compared to peers.
The digital banking software provider beat top and bottom line estimates, posting 16.4% year-over-year subscription revenue growth and significant EBITDA margin expansion in the quarter. The company maintains strong revenue momentum with a 13% year-over-year growth rate and healthy gross margins of 52%.
Q2 Holdings signed six Tier-1/Enterprise customers and grew its backlog by 21% year-over-year, while also reporting 13% SaaS ARR growth and a 10% year-over-year increase in total ARR.
Based on strong sales momentum in the first half of the year, the company provided third-quarter guidance above consensus and raised its full-year 2025 outlook.
Needham cited Q2’s position as a market leader that continues to gain share in the digital banking software space as key factors behind its positive outlook on the stock.
In other recent news, Q2 Holdings reported its second-quarter 2025 earnings, showing a notable shortfall in earnings per share (EPS) while slightly surpassing revenue expectations. The company’s EPS was reported at $0.18, which was significantly below the forecasted $0.52, representing a surprise of -65.38%. On the revenue front, Q2 Holdings achieved $195.1 million, marginally exceeding the anticipated $193.68 million. Despite the revenue beat, the earnings miss drew attention from investors. No analyst upgrades or downgrades were reported following the earnings release. These developments highlight the mixed financial performance of Q2 Holdings in the recent quarter.
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