"Our ARR and free cash flow results in Q2'24 were solid in a challenging selling environment, driven by the resilience of our subscription business model, consistent execution, operational discipline, and the actions we have taken over time to align our investments with market opportunities. We continue to rapidly de-lever, and our debt to EBITDA ratio was 2.3x at the end of Q2'24," said Kristian Talvitie, CFO.
"Reflecting our year-to-date performance and our outlook for the second half, we are narrowing the range of our FY'24 constant currency ARR guidance and maintaining our FY'24 free cash flow guidance. For Q3, the ARR guidance range is 11 to 12 percent growth, with free cash flow of approximately $220 million. It's worth noting that we are updating our FY'24 revenue and EPS guidance consistent with our updated ARR guidance range and also due to the impact of FX. We believe we have set our Q3'24 and FY'24 guidance appropriately," concluded Talvitie.
$ in millions | FY'24 Previous
| FY'24
| FY'24 YoY
| Q3'24
|
|
|
| |||||
Constant currency ARR | $2,190 - $2,250 | $2,200 - $2,240 | 11% - 13% | $2,115 - $2,130 |
|
Operating cash flow | ~$745 | ~$745 | ~22% | ~$225 |
|
Free cash flow | ~$725 | ~$725 | ~23% | ~$220 |
|
Revenue | $2,270 - $2,360 | $2,270 - $2,340 | 8% - 12% | $525 - $540 |
|
Earnings per share | $2.42 - $3.32 | $2.52 - $3.22 | 22% - 56% | $0.41 - $0.54 |
|
Non-GAAP earnings per share | $4.50 - $5.20 | $4.60 - $5.10 | 6% - 18% | $0.90 - $1.00 |
|
Reconciliation of Operating Cash Flow Guidance to Free Cash Flow Guidance
In millions | FY'24
| Q3'24
|
| |
|
|
| |||
Operating Cash Flow | ~$745 | ~$225 |
|
|
Capital expenditures | (~$20) | (~$5) |
|
|
Free Cash Flow | ~$725 | ~$220 |
|
|
Reconciliation of EPS Guidance to Non-GAAP EPS Guidance
|
| FY'24
| Q3'24
|
|
|
| |||
Earnings per share | $2.52 - $3.22 | $0.41 - $0.54 |
|
Stock-based compensation expense | $1.91 - $1.66 | $0.44 - $0.40 |
|
Intangible asset amortization expense | ~$0.68 | ~$0.17 |
|
Acquisition and transaction-related expense | ~$0.01 | ~$0.00 |
|
Income tax adjustments related to the reconciling items | ($0.52) – ($0.47) | ~($0.12) |
|
| Non-GAAP Earnings per share | $4.60 - $5.10 | $0.90 - $1.00 |
|
