The quarter modestly beat the standing bar. Q2 revenue of $292 million exceeded the prior $289–291 million company range and published consensus near $290 million, while non-GAAP EPS of $0.08 landed above consensus near $0.07. The beat was real but narrow, not a major reset of expectations.
| Metric | Q2 FY27 | Q2 FY26 / prior guide | Read |
|---|---|---|---|
| Revenue | $292M (Financial Overview) | $242M; prior guide $289–291M | 21% y/y growth; above guide |
| ARR | $1,218M (Financial Overview) | $1,001M | 22% y/y growth |
| Net new ARR | $56M (Financial Overview) | $53M | Record quarter |
| Non-GAAP operating income | $30.5M (Operating loss reconciliation) | $5.4M | Margin rose to 10% from 2% |
| Non-GAAP diluted EPS | $0.08 (Diluted EPS reconciliation) | $0.04 | Above consensus near $0.07 |
| Free cash flow | $(13.2)M (Selected Cash Flow Information) | $(7.1)M | Weaker quarterly cash conversion |
Growth quality held up beyond the headline revenue number. ARR accelerated to 22% growth, net new ARR reached $56 million, and more than half of ARR now comes from non-Endpoint products. The company also added more large customers and expanded multi-product penetration, indicating the platform story is producing broader customer adoption rather than relying only on its legacy endpoint business.
Profitability was the clearest upside surprise. Non-GAAP operating margin reached 10.5%, versus 2.2% a year earlier, and non-GAAP net income margin reached 9.8%, versus 5.4%. That operating leverage drove the EPS beat, although the GAAP result remained a $93.4 million net loss, with stock-based compensation and other adjustments accounting for much of the difference. (Margin Expansion; Net income reconciliation) 〔0〕
The outlook is better on revenue and operating profit, but not cleanly better per share. Full-year revenue guidance moved to $1.202–1.207 billion from $1.195–1.205 billion, and non-GAAP operating-income guidance rose to $124–128 million from $115–125 million. However, full-year non-GAAP EPS guidance fell to $0.30–0.32 from the prior $0.32–0.38 range, alongside a higher projected diluted share count of roughly 361 million versus 350 million previously. That makes the net message mixed: execution and operating leverage improved, but dilution reduces the benefit reaching each share. (Guidance)
Bottom line: a narrow earnings beat with a partially offsetting outlook. The filing improves the operating case through stronger ARR momentum, higher revenue expectations, and raised operating-income targets. But because full-year EPS guidance was cut and quarterly free cash flow turned more negative, the overall surprise is better than expected operationally—not an unqualified upgrade to shareholder earnings power.
Read the original 8-K on SEC EDGAR ↗