Total revenue of $1,470.9m beat the API Ninjas estimate of $1,440.1m by 2.1%, and non-GAAP diluted EPS of $0.31 beat the $0.29 estimate by 6.3%.
Net new ARR of $332.8m grew 51% year over year, accelerating against 25% growth in total ARR to $5.84bn -- the forward metric is running well ahead of the reported one.
FY27 net new ARR growth guidance rose 630 basis points to 34% at the midpoint, the largest single change in the release.
Free cash flow of $377.4m grew 33% while GAAP loss from operations narrowed to $33.2m from $105.5m.
Key metrics
Metric
Reported
Prior year
Change
Total revenue
$1,470.9m
$1,169.0m
+26%
Annual Recurring Revenue (ARR)
$5.84bn
—
+25% yoy
Net new ARR
$332.8m
—
+51% yoy
Falcon Flex ending ARR
$2.29bn
—
+101% yoy
GAAP loss from operations
-$33.2m
-$105.5m
-68.5%
Free cash flow
$377.4m
$283.6m
+33.1%
Guidance changes
Item
New guidance
Prior guidance
FY27 total revenue
$6,603.0 - $6,611.9 million
—
Q3 FY27 total revenue
$1,523.2 - $1,529.2 million
—
FY27 non-GAAP net income per share, diluted
$1.25 - $1.26
—
Q3 FY27 non-GAAP net income per share, diluted
$0.31
—
FY27 net new ARR growth
34% year-over-year at the midpoint
630 basis points lower before this increase
Quality of earnings
The quarter is still a GAAP operating loss of $33.2m; the $371.6m of non-GAAP operating income rests on adjustments including stock-based compensation and July 19 Incident costs.
GAAP net income of $5.3m was helped by a $1.4m tax benefit and $43.9m of interest income, so the swing to GAAP profit is not operating income.
Falcon Flex ending ARR of $2.29bn grew 101% and is now 39% of total ARR, concentrating growth in one commercial construct.
Gotchas & watch items
Interest income of $43.9m fell from $50.9m a year ago and is a shrinking contributor to the GAAP result.
Professional services revenue of $70.6m grew 7% against 27% subscription growth, so the mix shift is doing part of the margin work.
Q3 non-GAAP EPS guidance of $0.31 is flat against the $0.31 just delivered, implying no sequential per-share progress.