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SEC filingThe ongoing SaaS transition drove 8.6% topline growth and margin expansion, while operating cash flow nearly doubled year-over-year to fund strategic operations.
For the three months ended March 31, 2026, total revenues increased 8.6% to $613.5M compared to the prior period, primarily due to an increase in subscription revenue. This growth dynamic reflects the ongoing strategic shift in the mix of new software contracts toward more SaaS offerings. While other revenue also increased due to computer hardware sales, the topline expansion was somewhat offset by the expected decline in revenue from software licenses as the company accelerates its transition away from perpetual licensing models.
Gross profit rose 11.0% to $296.4M, expanding gross margin to 48.3%. This improvement occurred despite specific headwinds outlined by management, including declines in higher-margin software licenses and maintenance revenues, alongside increased merchant fees, hosting costs, and software development amortization. The ability to expand margins in the face of these pressures suggests strong operating leverage in the subscription model. Operating income grew 11.9% to $99.8M, resulting in a 16.3% operating margin, demonstrating that the company is effectively managing the cost structure during this business model transition.
Net income remained relatively flat at $81.2M compared to $81.1M in the prior year period, resulting in diluted EPS of $1.88 versus $1.84. Looking ahead, management expects that software license revenues will continue to decline as the company shifts its model away from perpetual software licenses to SaaS. Research and development expense consists mainly of costs associated with development in current products that do not qualify for capitalization, reflecting continued investment in the platform transition.