0000068505-26-000021
SEC filingRevenue grew 7.4% driven by Software & Services, but operating income fell 9.8% due to acquisition-related charges and supply chain costs.
Gross profit increased 4.8% to $1.4 billion, resulting in a gross margin of 50.2%. However, operating income declined 9.8% to $525.0 million, and operating margin contracted to 19.3%. The decline was driven by acquisition-related charges, including contingent earnout adjustments, and higher costs for memory components due to AI-driven demand. Net income fell 14.9% to $366.0 million, and diluted earnings per share decreased 13.8% to $2.18.
Management highlighted ongoing supply chain volatility, particularly rising memory costs from AI demand, and the uncertain impact of tariff refunds following a Supreme Court ruling. The company continues to assess the One Big Beautiful Bill Act's tax implications. Despite near-term margin pressure, the strong Software & Services momentum and acquisition pipeline position the company for sustained revenue growth, though operating leverage may remain challenged by integration costs and debt service.