The quarter beat on earnings, but not on sales. Revenue rose 4.5% year over year to $1.415 billion, essentially the top end of the company’s prior $1.400–$1.415 billion guide and slightly below the published consensus of roughly $1.43 billion. Non-GAAP diluted EPS was $3.38 versus a published consensus near $3.12, while non-GAAP operating margin reached 16.4%, above the prior 15%–16% target range (Non-GAAP reconciliation; Q1 2026 outlook).
| Metric | Q2 2026 | Q2 2025 / Prior expectation | Read |
|---|---|---|---|
| Revenue | $1.415B | $1.353B; consensus ~ $1.43B | +4.5% year over year, slightly below consensus (Income Statement; published consensus) |
| GAAP diluted EPS | $1.97 | $1.56 | +26.3% year over year (Income Statement) |
| Non-GAAP diluted EPS | $3.38 | $2.77; consensus ~ $3.12 | Clear beat (Non-GAAP reconciliation; published consensus) |
| GAAP operating margin | 10.8% | 9.3% | Improved 150 basis points (Income Statement; Non-GAAP reconciliation) |
| Non-GAAP operating margin | 16.4% | 15.0% | Improved 140 basis points and above prior guidance (Non-GAAP reconciliation; Q1 2026 outlook) |
| Full-year revenue growth outlook | 3.2%–4.2% | Prior: 4.0%–6.5% | Lowered (2026 outlook) |
| Full-year organic constant-currency growth | 2.0%–3.0% | Prior: 2.5%–5.0% | Lowered (2026 outlook) |
| Full-year non-GAAP EPS | $13.08–$13.24 | Prior: $12.98–$13.28 | Midpoint slightly higher, but range narrowed (2026 outlook) |
The stronger profit result reflects real margin improvement, not just accounting adjustments. GAAP operating income increased 20.4% to $152.2 million, while non-GAAP operating income rose 14.7% to $232.7 million. The non-GAAP margin expansion came despite higher stock-based compensation and cost-optimization charges, suggesting better underlying cost control; however, those adjustments totaled $80.4 million in the quarter, so the GAAP-to-adjusted gap remains material (Income Statement; Non-GAAP reconciliation; Adjustments table).
Management lowered the growth bar materially after the quarter. Full-year reported revenue growth is now expected at 3.2%–4.2%, down from 4.0%–6.5%, and organic constant-currency growth is now 2.0%–3.0%, down from 2.5%–5.0%. The new third-quarter revenue midpoint implies only 1.7% year-over-year growth, below Q2’s 4.5%, so the filing points to a softer demand trajectory even as profitability holds up (2026 outlook).
The net read is mixed: an earnings beat was offset by a growth reset. Investors received better-than-expected adjusted earnings and operating margins, but the more forward-looking signal is the reduced revenue outlook. The modest increase in the full-year non-GAAP EPS midpoint is largely a profitability and share-count story—not evidence of stronger top-line momentum—so the filing improves the near-term earnings picture while weakening the growth case.
Read the original 8-K on SEC EDGAR ↗