Q2 FY26 revenue reached $812 million, up 11% year-over-year, with product revenue growing 22% and strong international demand, especially in EMEA and APAC.
Demand fueled by hybrid multi-cloud adoption, expanding cybersecurity threats, and rapid enterprise AI adoption, with over 90% of enterprises running hybrid multi-cloud.
Raised FY26 revenue growth outlook to 7%-8% from 5%-6% on robust pipeline and secular demand trends in hybrid multi-cloud, security, and AI.
Significant innovation in AI-powered security and application delivery, including new AI WAF, Agentic Bot Defense, and AI Remediate solutions.
Q2 revenue reached $812 million, with 51% from product and 49% from services.
Systems revenue grew 26% year-over-year to $226 million; software revenue up 17% to $184 million; services revenue up 2%.
Subscription-based software revenue rose 20% and now represents 90% of software revenue.
Recurring revenue contributed 70% of Q2 revenue.
GAAP gross margin was 81.4%; non-GAAP gross margin 83.7%.
GAAP net income was $148 million ($2.58/share); non-GAAP net income $223 million ($3.90/share), up 14% EPS year-over-year.
Record free cash flow of $348 million; cash and investments at $1.46 billion; deferred revenue at $2.12 billion, up 10% year-over-year.
Q3 revenue expected between $820 million-$840 million, ~6.5% growth at midpoint; non-GAAP EPS guidance: $3.91-$4.03 per share.
FY26 revenue growth outlook raised to 7%-8%; non-GAAP EPS outlook increased to $16.25-$16.55.
FY26 non-GAAP gross margin expected at 82.5%-83.5%; operating margin at 34%-35%.
Anticipates higher component costs (mainly memory) will lower gross margins sequentially from Q3 to Q4.
Full-year share repurchases to be at least 50% of free cash flow.
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