Revenue over the twelve months to Q3 2026 was $5.27 billion, which rose 2.9% on the year before. That growth rate was down 1.1 percentage points on the rate a quarter earlier. Net income over the twelve months was $1.01 billion, which fell 0.3% on the year before. The trailing net margin was 19.2%. The trailing operating margin was 24.9%, down 0.9 percentage points from a year earlier.
Operating cash flow over the twelve months was $1.16 billion, up 4.4% on the year before. Capital spending was $82.5 million, or 1.6% of revenue. Free cash flow, operating cash flow less capital spending, was $1.07 billion, up 4.6% on the year before. Free cash flow was 20.4% of revenue (the free-cash-flow margin), up 0.3 percentage points from a year earlier. The average diluted share count fell 1.0% over the year.
Today’s free-cash-flow margin of 20.4% is higher than 80% of the company’s own past quarterly readings, which have ranged from 0.6% to 25.4%. Today’s operating margin of 24.9% is higher than 76% of the company’s own past quarterly readings, which have ranged from 10.4% to 26.3%. Today’s twelve-month revenue growth rate of 2.9% is higher than 26% of the company’s own past quarterly readings, which have ranged from −7.0% to 20.0%.
Guidance
The company provided a specific tax rate expectation. The company gave its full-year 2026 guidance for effective income tax rate: 22%.
What it means for value
Our model shows high sensitivity to growth assumptions. In our model, growth 5 percentage points lower would lower the value by 24.7%, and 5 percentage points higher would raise it by 32.4%. A free-cash-flow margin 1 percentage point lower would lower it by 4.6%.
What to watch
The next filing will reveal if the recent deceleration in revenue growth continues. Finally, it will indicate if the free cash flow margin expansion is sustainable relative to historical peaks.
