The quarter was roughly in line on revenue but better on earnings. Q2 revenue of $1.584 billion was essentially at the published consensus of about $1.58 billion, while non-GAAP EPS of $2.11 exceeded the roughly $2.05 expectation. That makes this an earnings beat driven more by profitability than by sales.
| Metric | Q2 2026 | Comparison | Source |
|---|---|---|---|
| Revenue | $1.584B | ~ $1.58B consensus | (Q2 2026 Key Metrics) |
| Non-GAAP EPS | $2.11 | ~ $2.05 consensus | (Q2 2026 Key Metrics) |
| Non-GAAP operating margin | 45.5% | 44.5% midpoint of prior Q2 guide | (Q2 2026 Key Metrics; Q1 2026 Outlook) |
| Operating cash flow | $635M | $356M in Q1 2026 | (Cash Flow statement) |
Management raised the full-year outlook rather than merely reaffirming it. The revenue range increased to $6.260–$6.340 billion from $6.125–$6.225 billion, lifting the midpoint by about 2%; non-GAAP EPS rose to $8.05–$8.15 from $7.85–$7.95. The revised outlook also implies approximately 19% revenue growth and $8.10 EPS at the midpoint, above the published full-year consensus of roughly $6.2 billion revenue and $7.94 EPS. (Fiscal Year 2026 Financial Outlook)
The main support for the raise is demand visibility, not a margin expansion story. Backlog reached approximately $8.1 billion, but revenue expected from beginning backlog declined to about 65% from roughly 66% in the prior outlook, meaning the higher forecast still depends on additional bookings and execution during the year. Recurring revenue remained around 80%, which supports visibility. (CFO Commentary; Fiscal Year 2026 Financial Outlook)
Profitability remains the trade-off. Q3 guidance calls for 43.5%–44.5% non-GAAP operating margin, below Q2's 45.5%, while full-year non-GAAP operating margin is guided to 43.75%–44.75% versus 44.6% in 2025. The filing also projects stock-based compensation rising to about 9% of revenue and acquired-intangible amortization increasing to roughly $289 million for 2026. (Q3 2026 Financial Outlook; Profitability Trends; Reconciliation of GAAP Operating Income to Non-GAAP Operating Income)
Net read: a genuine but not blowout positive surprise. Revenue met expectations, EPS modestly beat, and the more important forward signal was the raised annual outlook backed by record backlog and stronger cash generation. The offset is that the improved growth outlook comes with lower operating-margin expectations and higher dilution-related expense, keeping this a moderate beat rather than an unambiguous acceleration.
Read the original 8-K on SEC EDGAR ↗