Expectations were comfortably exceeded. Published estimates were roughly $264.9 million of revenue and $0.65 of adjusted diluted EPS; delivered $277.7 million of revenue and $0.77 of adjusted diluted EPS.
| Metric | Q2 2026 | Q2 2025 / expectation | Read |
|---|---|---|---|
| SaaS and license revenue | $188.8M | $170.0M prior year; $185.5M–$185.7M company guide | Above guide; +11.1% YoY (Financial Statements; Financial Outlook) |
| Total revenue | $277.7M | $254.3M prior year; ~$264.9M consensus | +9.2% YoY; roughly 4.8% above consensus (Financial Statements) |
| Adjusted EBITDA | $57.7M | $49.9M prior year | +15.6% YoY (Adjusted EBITDA reconciliation) |
| Adjusted diluted EPS | $0.77 | $0.62 prior year; ~$0.65 consensus | +24.2% YoY; above consensus (Adjusted net income per share reconciliation) |
| GAAP diluted EPS | $0.48 | $0.63 prior year | Down sharply, mainly reflecting lower interest income and $9.3M of litigation expense (Income Statement; Adjusted EBITDA reconciliation) |
| Free cash flow | $37.0M | $18.2M prior year | More than doubled (Free Cash Flow reconciliation) |
The recurring business was the main source of the beat. SaaS and license revenue grew 11.1% and came in about $3.1 million above the company’s own second-quarter guide, while hardware and other revenue rose a more modest 5.5%. That mix matters: the higher-margin subscription business outperformed, rather than the result being driven only by hardware volume (Financial Statements; Financial Outlook).
The GAAP headline understates the operating result, but the unusual costs are real. GAAP net income attributable to common stockholders fell to $24.2 million from $34.6 million, and GAAP diluted EPS declined to $0.48 from $0.63. However, the quarter included $9.3 million of non-ordinary litigation expense versus $0.1 million a year earlier, while interest income also fell by $7.3 million. Excluding those and other specified items, adjusted EBITDA rose 15.6% and adjusted diluted EPS rose to $0.77 (Income Statement; Adjusted EBITDA reconciliation; Adjusted net income per share reconciliation). The cleaner read is strong underlying execution, with a meaningful legal-cost overhang rather than a deterioration in the core model.
The raised outlook is the clearest forward signal. Full-year SaaS and license revenue guidance increased to $754.0 million–$754.4 million, $10.2 million above the prior guidance midpoint of $744.0 million. That is a roughly 1.4% midpoint increase after the company had already raised its outlook in May, when it moved the range to $749.5 million–$750.5 million.
Cash generation improved materially, while the cash balance decline was largely mechanical. Operating cash flow reached $92.5 million versus $46.8 million in the first half of 2025, and free cash flow reached $86.8 million versus $36.1 million. Cash fell to $479.4 million primarily because repaid the $500 million of 0% convertible notes in January; that balance-sheet reduction was already disclosed as part of the debt maturity rather than a new quarter-specific warning (Cash Flow statement; Balance Sheet; Financial Highlights). Overall, the filing lands as a broad positive surprise: stronger recurring growth, a clear adjusted-profit beat, substantially better cash conversion, and another guidance increase, partially offset by elevated litigation expense and weaker GAAP earnings.
Read the original 8-K on SEC EDGAR ↗