Despite delivering a strong “beat” on both top and bottom lines for the quarter, the stock tumbled in extended trading. This sell-off was primarily driven by mixed Q4 revenue guidance and near-term cautious commentary on hardware costs and sales team transitions.
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Q3 FY2026 Financial Highlights (The “Beat”)
- Revenue: $850.5 million (up 25% YoY), beating Wall Street expectations of $835.6 million.
- Non-GAAP EPS: $1.08, outpacing analyst projections of $1.01.
- Annual Recurring Revenue (ARR): Reached $3.525 billion, up 25% YoY (up 21% excluding the Red Canary acquisition, which contributed $127 million).
- Operating Margin: Hit a record all-time high of 23% (non-GAAP).
- Free Cash Flow (FCF): $136.0 million (up 14% YoY), representing a robust FCF margin.
