The quarter was materially below the standing bar. Prior company guidance called for at least $750 million of revenue and $260 million of adjusted EBITDA, while published consensus was roughly $759 million of revenue and $0.40 of non-GAAP EPS. Actual revenue was $715 million, adjusted EBITDA was $241 million, and non-GAAP EPS was $0.34.
| Metric | Q2 2026 | Q2 2025 | YoY / comparison |
|---|---|---|---|
| Revenue | $715 million (Financial Highlights) | $694 million (Financial Highlights) | +3% YoY; below ~$750 million company guide and ~$759 million consensus |
| Adjusted EBITDA | $241 million (Financial Highlights) | $271 million (Financial Highlights) | -11%; below $260 million company guide |
| Adjusted EBITDA margin | 34% (Financial Highlights) | 39% (Financial Highlights) | Down 5 percentage points |
| GAAP net income | $64 million (Financial Highlights) | $90 million (Financial Highlights) | -29% |
| Non-GAAP diluted EPS | $0.34 (Non-GAAP reconciliation) | $0.41 (Non-GAAP reconciliation) | Below ~$0.40 consensus |
| Operating cash flow, six months | $545 million (Cash Flow statement) | $456 million (Cash Flow statement) | +20% |
The core problem is a sharp deceleration, not merely an earnings miss. Revenue growth slowed to 3% from 19% a year earlier, while operating expenses increased 6% year over year, causing operating income to fall 13% despite the modest revenue increase (Income Statement). The company’s statement that the quarter “did not meet the standard” is consistent with the numbers: growth and profitability both deteriorated at the same time.
The margin decline makes the miss more consequential. Adjusted EBITDA fell 11% and margin contracted to 34% from 39%, while non-GAAP net income declined 22% to $158 million (Financial Highlights; Non-GAAP reconciliation). Stock-based compensation remained substantial at $110 million for the quarter, although it declined from $129 million a year earlier (Stock-based compensation table). That reduction helped, but it was not enough to offset weaker operating leverage.
The filing offers no immediate repair through guidance. It does not provide a new revenue or adjusted EBITDA outlook, leaving investors without a quantified path back to the prior $750 million-plus quarterly expectation (Outlook disclosure). Management points to execution changes, platform upgrades, AI, measurement, and new commerce-media integrations, but those are longer-term initiatives rather than evidence of a near-term rebound.
Cash generation and balance-sheet flexibility are genuine offsets, but not the main read. Six-month operating cash flow increased to $545 million, cash and equivalents reached $1.12 billion, and the company repurchased approximately $78 million of stock in the quarter (Cash Flow statement; Balance Sheet; Share Repurchases). Those strengths support continued investment and buybacks, but they do not erase the central result: the quarter missed both the company’s prior target and market expectations while exposing a meaningful slowdown in the growth engine.
Read the original 8-K on SEC EDGAR ↗