The quarter cleared both the company’s bar and consensus. Revenue was $1.336 billion versus prior Q1 guidance of $1.300–$1.325 billion, while adjusted diluted EPS was $0.71 versus published consensus of approximately $0.69 and prior guidance of $0.68–$0.70. The release also says fiscal-year guidance was raised, although the supplied filing text does not include the new full-year ranges.
| Metric | Q1 FY27 | Q1 FY26 | Expectation / prior guide |
|---|---|---|---|
| Net revenue | $1,336M | $1,257M | $1,300M–$1,325M guide |
| Adjusted revenue, comparable basis | $1,336M | $1,208M | — |
| Adjusted diluted EPS | $0.71 | $0.60 | ~$0.69 consensus; $0.68–$0.70 guide |
| Free cash flow | $430M | $405M | — |
| Non-GAAP operating margin | 50.0% | 51.7% | — |
Growth is increasingly coming from the newer Trust-Based business, not Cyber Safety. Trust-Based Solutions revenue rose to $490 million from $388 million, while Cyber Safety Platform revenue fell to $846 million from $869 million. On a comparable basis, total revenue grew about 11%, but the mix shift matters: the faster-growing segment now represents roughly 37% of revenue, up from about 32% a year earlier. (Performance Metrics)
The earnings beat was helped by lower interest and taxes, while core GAAP operating profit was essentially flat. GAAP operating income was $443 million versus $446 million, and GAAP operating margin fell to 33.2% from 35.5%. Net income nevertheless rose to $215 million from $135 million because interest expense declined by $32 million and income-tax expense fell by $57 million. The cleaner adjusted result was stronger—adjusted EPS increased to $0.71 from $0.60—but the 50.0% adjusted operating margin was still below 51.7% a year earlier. (Income Statement; Non-GAAP Reconciliation)
Cash generation was solid, but the balance sheet still carries substantial leverage. Free cash flow reached $430 million, and cash rose to $564 million after $100 million of share repurchases and $81 million of dividends. Long-term debt remained $7.975 billion, so the quarter supports capital returns but does not materially change the leverage picture. (Cash Flow statement; Balance Sheet)
Net read: a genuine but not transformative positive surprise. Revenue beat the top of its range, adjusted EPS exceeded both guidance and consensus, and management raised the fiscal-year outlook. The main offset is weaker reported Cyber Safety revenue and lower operating margins, which temper how much the beat changes the underlying story. Overall, the filing moves expectations higher, but the strongest evidence is concentrated in Trust-Based Solutions and below-the-line EPS support rather than broad operating-margin expansion.
Read the original 8-K on SEC EDGAR ↗