NET: Revenue grew 39% as non-GAAP operating margin expanded to 17.5%

What happened

Revenue rose 39% year over year to $782.5 million, while non-GAAP operating margin, a measure of operating profit excluding certain items, increased to 17.5%. The company provided revenue guidance of $2.963–$2.964 billion for FY26, while GAAP gross margin and free cash flow margin declined year over year.

Confirmed

Global impact / market context

Faster revenue growth and a higher adjusted operating margin suggest sales expanded while operating costs grew more slowly on that measure. However, declines in GAAP gross margin and free cash flow margin point to weaker profit per sale and less cash generated from revenue, tempering the growth picture.

Analyst inference

The results combine faster sales and stronger adjusted operating profitability with declines in gross profitability and cash generation. This contrast matters because operating gains do not necessarily mean more cash is available to fund investment; the article provides no explanation for the declines or margin outlook.

Analyst inference

What to watch

1. Compare later revenue results with the $2.963–$2.964 billion FY26 guidance range; falling short could weaken confidence in the growth outlook, while meeting it would support the stated target. Analyst inference
2. Track whether GAAP gross margin, the share of sales remaining after direct costs, continues to decline or improves, since that affects how much revenue can cover other expenses. Analyst inference
3. Watch free cash flow margin alongside operating margin; if operating profitability improves while cash generation weakens, less cash may remain available to fund the company’s investments. Analyst inference

Evidence

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