Financial Performance - Q3 FY2026 total revenue reached $416.0 million, reflecting a 29% year-over-year growth[4] - Annual Recurring Revenue (ARR) at the end of Q3 FY2026 was $1.745 billion, also a 29% year-over-year increase[4] - The number of customers with ARR over $100,000 increased by 219 in Q3, totaling 2,990 customers[4] - Revenue for the three months ended November 1, 2025, was $415,975,000, representing a 29% increase from $321,981,000 for the same period in 2024[32] - GAAP revenue for the three months ended November 1, 2025, was $415.975 million, representing a 29% increase year-over-year[37] - Revenue growth in constant currency for the three months ended November 1, 2025, was 29%, matching the GAAP revenue growth rate[37] Profitability - GAAP operating loss improved to $(1.7) million from $(47.4) million in Q3 FY2025, marking a significant reduction[3] - Non-GAAP operating income for Q3 FY2026 was $79.8 million, up from $33.9 million in the same quarter last year[3] - Non-GAAP net income per share, diluted, increased to $0.15, compared to $0.07 in Q3 FY2025[3] - The company achieved its first quarter of GAAP profitability in Q3 FY2026[4] - Net income for the three months ended November 1, 2025, was $7,766,000, a recovery from a net loss of $37,806,000 in the same period last year[32] - Non-GAAP net income for the three months ended November 1, 2025, was $89.279 million, compared to $43.480 million for the same period last year[37] - GAAP net income for the three months ended November 1, 2025, was $7.766 million, a recovery from a loss of $37.806 million in the prior year[37] Cash Flow and Liquidity - Net cash provided by operating activities for the three months ended November 1, 2025, was $63,704,000, compared to $36,013,000 for the same period in 2024[34] - Free cash flow for the three months ended November 1, 2025, was $55.845 million, up from $31.237 million in the prior year[43] - Adjusted free cash flow margin for the three months ended November 1, 2025, was 13%, compared to 10% in the same quarter last year[43] - Adjusted free cash flow margin is considered useful for evaluating liquidity, even if negative, by excluding non-recurring capital expenditures[26] Assets and Liabilities - Total current assets increased to $1,257,979,000 as of November 1, 2025, up from $1,145,154,000 as of February 1, 2025[29] - Total assets reached $2,313,694,000 as of November 1, 2025, compared to $2,024,302,000 as of February 1, 2025[29] - Total liabilities increased to $1,010,339,000 as of November 1, 2025, from $955,106,000 as of February 1, 2025[29] - Cash and cash equivalents rose to $275,111,000 as of November 1, 2025, compared to $227,576,000 as of February 1, 2025[29] Margins - Non-GAAP operating margin for FY2026 is projected to be 16%[10] - GAAP gross margin for the three months ended November 1, 2025, was 77%, consistent with the previous year[37] - Non-GAAP operating margin for the three months ended November 1, 2025, improved to 19%, compared to 11% in the same quarter last year[37] Comprehensive Income - The company reported a comprehensive income of $8,342,000 for the three months ended November 1, 2025, compared to a comprehensive loss of $39,411,000 in the same period last year[32] Future Outlook - For Q4 FY2026, total revenue is expected to be between $421 million and $423 million, representing a year-over-year growth of 22%[10] - The company continues to focus on leveraging AI to enhance operational efficiency and sustainability for its customers[2] Stock-Based Compensation - Total stock-based compensation expense-related charges for the three months ended November 1, 2025, were $81.513 million, compared to $77.677 million in the prior year[43]

Financial Performance - Net revenue for Q1 fiscal 2026 was $342.1 million, representing a year-over-year increase of 7.3%[8] - Gross profit was $149.3 million, a 3.1% increase year-over-year, with a gross margin of 43.6%, down 180 basis points year-over-year[8] - The company reported a net loss of $6.4 million, with a diluted loss per share of $0.05[8] - Adjusted EBITDA for Q1 was $13.4 million, with an adjusted EBITDA margin of 3.9%[8] - Net revenue for the three months ended November 1, 2025, was $342,127,000, compared to $318,818,000 for the same period in 2024, reflecting a year-over-year increase of approximately 7.3%[21] - Adjusted EBITDA for the three months ended November 1, 2025, was $13,429,000, with an Adjusted EBITDA margin of 3.9%, compared to $13,494,000 and 4.2% for the same period in 2024[21] Client Metrics - Active clients decreased to 2.307 million, down 0.1% quarter-over-quarter and 5.2% year-over-year[8] - Active clients as of November 1, 2025, totaled 2,307,000, a slight decrease from 2,434,000 in the same period of 2024[23] - Net revenue per active client increased to $559, up 5.3% year-over-year[8] Financial Outlook - The financial outlook for Q2 fiscal 2026 projects net revenue between $335 million and $340 million, reflecting a year-over-year growth of 7.3% to 8.9%[5] - The updated financial outlook for fiscal year 2026 estimates net revenue between $1.32 billion and $1.35 billion, indicating a year-over-year growth of 4.2% to 6.5%[6] - The company expects a full fiscal year 2026 gross margin between 43% and 44%[6] - Stitch Fix anticipates being free cash flow positive for the full fiscal year 2026[6] Cash Flow and Expenses - Free Cash Flow for the three months ended November 1, 2025, was $5,574,000, down from $9,945,000 for the same period in 2024[22] - Net cash provided by operating activities from continuing operations was $10,913,000 for the three months ended November 1, 2025, compared to $14,268,000 for the same period in 2024[18] - Cash and cash equivalents at the end of the period were $114,494,000, down from $137,153,000 at the end of the same period in 2024[18] - The company incurred $11,496,000 in stock-based compensation expense for the three months ended November 1, 2025, compared to $12,650,000 for the same period in 2024[21] - The company reported a net decrease in cash and cash equivalents of $542,000 for the three months ended November 1, 2025, compared to a decrease of $25,709,000 for the same period in 2024[18] - The company experienced a change in inventory reserves of $2,308,000 for the three months ended November 1, 2025, compared to $4,970,000 for the same period in 2024[18]

Financial Performance - Net sales for Q3 2025 were $331.3 million, a 2.2% increase from $324.3 million in Q3 2024, driven by strong performance in hunting, fishing, and personal protection categories[3] - Same store sales increased by 2.2% in Q3 2025 compared to Q3 2024, attributed to improved inventory management and digital marketing efforts[3] - Gross profit was $108.7 million, representing 32.8% of net sales, up from 31.8% in Q3 2024, due to stronger product margins and improved inventory management[3] - Adjusted net income for Q3 2025 was $3.0 million, compared to $1.4 million in Q3 2024, while diluted earnings per share improved to $0.00 from a loss of $(0.01)[5] - Net sales for the thirteen weeks ended November 1, 2025, were $331,323 thousand, a year-over-year increase of $7,062 thousand or 2.2% compared to $324,261 thousand for the same period in 2024[19] - Gross profit for the thirty-nine weeks ended November 1, 2025, was $278,311 thousand, representing a gross margin of 31.8%, up from 31.1% in the prior year, with an increase of $11,419 thousand year-over-year[21] - The company reported a net loss of $28,329 thousand for the thirty-nine weeks ended November 1, 2025, compared to a net loss of $24,336 thousand for the same period in 2024, reflecting an increase in loss of $3,993 thousand[21] - For the thirteen weeks ended November 1, 2025, the net income was $8 million, compared to a net loss of $364 million for the same period in 2024[32] - Adjusted EBITDA for the thirteen weeks ended November 1, 2025, was $18,621 million, an increase from $16,380 million in the same period of 2024, representing a growth of approximately 7.57%[32] - Overall, the adjusted EBITDA for the thirty-nine weeks ended November 1, 2025, was $17,901 million, compared to $15,052 million in 2024, reflecting an increase of approximately 18.9%[32] Expenses and Costs - SG&A expenses rose to $104.5 million, or 31.5% of net sales, compared to $100.0 million, or 30.8% of net sales in Q3 2024, reflecting reinvestment in customer-facing areas[5] - Operating expenses for the thirteen weeks ended November 1, 2025, were $104,452 thousand, which is 31.5% of net sales, compared to $99,973 thousand or 30.8% of net sales in the prior year[19] - The company incurred interest expense of $10,718 thousand for the thirty-nine weeks ended November 1, 2025, compared to $9,408 thousand in the same period of the previous year[21] - Interest expense for the thirteen weeks ended November 1, 2025, was $4,053 million, up from $3,317 million in the prior year, indicating an increase of about 22.2%[32] - Depreciation and amortization for the thirty-nine weeks ended November 1, 2025, totaled $29,401 million, slightly down from $30,536 million in 2024[32] - Stock-based compensation expense for the thirty-nine weeks ended November 1, 2025, was $2,400 million, a decrease from $3,438 million in the same period of 2024, reflecting a reduction of approximately 30.2%[32] - Legal accrual for the thirteen weeks ended November 1, 2025, was $3,000 million, compared to $1,750 million in the same period of 2024, showing an increase of 71.4%[32] - Director and officer transition costs for the thirty-nine weeks ended November 1, 2025, were $1,738 million, up from $709 million in the same period of 2024, indicating an increase of approximately 144.5%[32] - The company reported a cancelled contract expense of $911 million for the thirty-nine weeks ended November 2, 2024, which was not present in the current year[32] Inventory and Capital Expenditures - The company reduced total inventory by $14.2 million year-over-year and $19.5 million sequentially, focusing on core and seasonally relevant products[7] - Capital expenditures for 2025 are projected to be less than $25 million, primarily for strategic technological investments and store maintenance[7] Liquidity and Debt - The company ended Q3 2025 with net debt of $179.7 million and total liquidity of $111.9 million[11] - Cash and cash equivalents decreased to $2,246 thousand at the end of the period from $2,832 thousand at the beginning of the period[25] - The income tax benefit for the thirty-nine weeks ended November 1, 2025, was $(1,027) million, a significant improvement from $(7,364) million in 2024[32] Store Openings - The company opened a new store in Surprise, Arizona, marking its 11th store in the state and its first personal protection-focused concept[2] Assets - The company had total assets of $913,867 thousand as of November 1, 2025, an increase from $852,102 thousand as of February 1, 2025[23]

SentinelOne Announces Third Quarter Fiscal Year 2026 Financial Results Revenue increased 23% year-over-year ARR up 23% year-over-year MOUNTAIN VIEW, Calif. – December 4, 2025 – SentinelOne, Inc. (NYSE: S) today announced financial results for the third quarter of fiscal year 2026 ended October 31, 2025. "We continue to demonstrate a strong combination of top-tier growth and margin improvement. Our third-quarter performance underscores the growing demand for our AI-native security platform that combines data ...

Financial Performance - Net sales for the third quarter of fiscal 2025 reached $2,857.6 million, a 12.9% increase from $2,530.1 million in the same period of fiscal 2024[92] - Gross profit for the third quarter of fiscal 2025 was $1,155.7 million, compared to $1,005.6 million in the prior year, reflecting a gross margin improvement[92] - Comparable sales increased by 6.3% in the third quarter of fiscal 2025, compared to a 0.6% increase in the same quarter of fiscal 2024[92] - Operating income for the third quarter of fiscal 2025 was $309.4 million, slightly down from $318.5 million in the same quarter of fiscal 2024[92] - Net income for the third quarter of fiscal 2025 was $230.9 million, compared to $242.2 million in the same period of fiscal 2024[92] - Net sales increased by $327.5 million, or 12.9%, to $2.9 billion for the 13 weeks ended November 1, 2025, compared to $2.5 billion for the same period in 2024[94] - Gross profit rose by $150.0 million, or 14.9%, to $1.2 billion for the 13 weeks ended November 1, 2025, with a gross profit margin of 40.4%[95] - Net income was $230.9 million for the 13 weeks ended November 1, 2025, down from $242.2 million for the same period in 2024[100] - For the 39 weeks ended November 1, 2025, net sales increased by $686.4 million, or 8.8%, to $8.5 billion compared to $7.8 billion for the same period in 2024[101] Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $158.7 million, or 23.3%, to $840.9 million, representing 29.4% of net sales for the 13 weeks ended November 1, 2025[96] - SG&A expenses for the 39 weeks ended November 1, 2025, increased by $300.3 million, or 15.1%, to $2.3 billion, representing 27.0% of net sales[104] Store Expansion and Operations - The number of stores at the end of the third quarter of fiscal 2025 was 1,500, an increase from 1,437 stores at the end of the same quarter in fiscal 2024[92] - The company opened 58 new stores during the 39 weeks ended November 1, 2025, compared to 57 new stores in the same period in 2024[118] Inventory and Cash Management - Merchandise inventories increased by $378.5 million, or 16.0%, to $2.7 billion as of November 1, 2025[117] - The company had cash and cash equivalents of $204.9 million as of November 1, 2025, compared to $177.8 million as of November 2, 2024[109] Share Repurchase and Debt - The company repurchased 1,658,206 shares at a total cost of $699.1 million during the 39 weeks ended November 1, 2025[126] - As of November 1, 2025, the company had $488.3 million in borrowings outstanding under its credit facility, with a weighted average interest rate of 6.42% for the 39 weeks ended November 1, 2025[130] - The company entered into a credit facility with a maximum revolving loan of $1.0 billion, maturing on March 13, 2029, and requires a minimum fixed charge coverage ratio of 1.0 when availability falls below a specified threshold[127] - As of November 1, 2025, the company had $551.7 million in total outstanding borrowings under its credit facilities, compared to $199.7 million as of November 2, 2024[135] Economic and Market Conditions - The company anticipates that persistent inflation and macroeconomic pressures may negatively impact consumer spending and sales trends for the remainder of fiscal 2025[80] - The company is subject to seasonal fluctuations, with significant sales and profits realized during the fourth quarter due to the holiday season, impacting overall financial performance[132] - A hypothetical 1% increase in interest rates on variable debt would not materially impact the company's operating income for the 39 weeks ended November 1, 2025[136] - The company is exposed to foreign currency exchange rate fluctuations, but this exposure is not material to its financial condition or results of operations[137] Strategic Focus and Growth - The company is expanding its international presence through a joint venture in Mexico and a franchise in the Middle East, along with the acquisition of Space NK in the U.K. and Ireland[74] - The strategic focus areas include assortment, experience, loyalty, and access to enhance customer engagement and drive growth[75] - The company aims to leverage fixed costs and improve merchandise margins to increase long-term operating profit despite incremental investments in new stores and technology[78] Compliance and Credit Facilities - The company maintains compliance with all terms and covenants of its loan agreements as of November 1, 2025[130] - The credit facility includes a $50.0 million subfacility for letters of credit[127] - Space NK, a wholly owned subsidiary, has a multi-currency revolving credit facility of up to £40.0 million, with £63.4 million outstanding as of November 1, 2025, and must maintain an interest coverage ratio of at least 4.0 to 1.0[131]

Financial Performance - For the six months ended October 31, 2025, the company reported net sales of $2.0 billion, a decrease of 4% compared to the same period last year[106]. - Gross profit for the same period was $1.2 billion, also a decrease of 4%, with a gross margin increase of 0.3 percentage points to 59.5%[106]. - Operating income decreased by 9% to $565 million, with an operating margin decline of 1.5 percentage points to 28.9%[106]. - Diluted earnings per share for the six months ended October 31, 2025, were $0.83, a decrease of 13% from $0.96 in the prior year[107]. - For the six months ended October 31, 2025, net sales totaled $2.0 billion, a decrease of $86 million, or 4%, driven by unfavorable price/mix[124]. - Gross profit for the six months ended October 31, 2025, totaled $1.2 billion, a decrease of $45 million, or 4%, with gross margin increasing to 59.5% from 59.2%[129]. - Operating income for the three months ended October 31, 2025, totaled $305 million, a decrease of $36 million, or 10%, compared to the same period last year, with an operating margin decrease of 1.7 percentage points to 29.4%[134]. - For the six months ended October 31, 2025, operating income was $565 million, down $57 million, or 9%, with an operating margin decrease of 1.5 percentage points to 28.9%[135]. - Diluted earnings per share for the three months ended October 31, 2025, decreased 14% to $0.47, driven by the decrease in operating income[138]. Market Performance - The United States market experienced a 9% decline in net sales, primarily due to the end of the Korbel relationship and the absence of the Sonoma-Cutrer brand[112]. - Emerging markets saw a 10% increase in net sales, with Mexico and Brazil growing by 17% and 22%, respectively[112]. - Canada's net sales declined 62% due to volumetric declines in the American whiskey portfolio and JD RTDs, attributed to the absence of American-made beverage alcohol from retail shelves in most provinces[116]. - Mexico's net sales increased 17%, driven by higher volumes and prices of New Mix, although tequila sales declined as consumer preferences shifted to lower-priced products[116]. - Brazil's net sales increased 22%, reflecting higher volumes of JDTA and JDTW, supported by continued distribution expansion and favorable retailer ordering patterns[116]. - Net sales for JDTA increased 16%, primarily due to growth in Brazil and favorable timing of retailer ordering patterns[119]. - New Mix net sales increased 28%, driven by strong growth in Mexico and market share gains in a growing category[122]. - Non-branded and bulk's net sales decreased 61%, driven by the decline of used barrel sales as demand and pricing adjusted to current market conditions[121]. - Net sales for the Rest of Whiskey increased 54%, driven by the launch of JDTB and growth of The GlenDronach, benefiting from an estimated net increase in distributor inventories in the United States[122]. Restructuring and Initiatives - A restructuring initiative was approved, resulting in a workforce reduction of approximately 12% and incurring $16 million in related charges during the first and second quarters of fiscal 2026[87]. - The company underwent a restructuring initiative, reducing its workforce by approximately 12% and closing the Brown-Forman Cooperage, which negatively impacted operating expenses[104]. - The company transitioned its portfolio distribution in California and 13 additional markets, positively impacting net sales in the first quarter of fiscal 2026[105]. - The company has authorized a share repurchase program of up to $400 million, with $99 million spent on repurchases in October 2025 alone[153]. Tax and Refunds - The company recognized a $13 million franchise tax refund in the first quarter of fiscal 2025 due to a change in tax calculation methodology[86]. - A net benefit of $18 million was recognized in the first quarter of fiscal 2026 related to the collection of substitution drawback claims filed with the U.S. Government[89]. - The effective tax rate for the three months ended October 31, 2025, increased to 20.2% from 17.6% year-over-year, primarily due to unfavorable prior fiscal year true-ups[136]. Acquisitions and Divestitures - Brown-Forman acquired Gin Mare Brand, S.L.U. during fiscal 2023, which included adjustments for fair value changes to contingent consideration liabilities[83]. - The divestiture of Finlandia vodka and Sonoma-Cutrer wine businesses occurred in fiscal 2024, with related transition services agreements impacting financial results[84]. - The company ended its sales, marketing, and distribution relationship with Korbel Champagne Cellars effective June 30, 2025, impacting net sales and operating income for the non-comparable period[94]. Economic Environment - The company faced ongoing macroeconomic and geopolitical uncertainties, which negatively impacted consumer confidence and discretionary spending[106]. - The company anticipates organic net sales and organic operating income to decline in the low-single digit range for fiscal 2026[142]. - Estimated capital expenditures for fiscal 2026 have been updated to a range of $110 to $120 million, down from $125 to $135 million[141]. Financial Metrics and Adjustments - The company uses non-GAAP measures to provide a clearer understanding of financial performance, adjusting for acquisitions, divestitures, and foreign exchange[82]. - Organic net sales and other financial measures are adjusted to exclude the effects of currency fluctuations to provide a consistent basis for performance evaluation[89]. - Advertising expense was flat for the three months ended October 31, 2025, while SG&A expense was also flat, reflecting a balance between increased investment in campaigns and lower spending across the portfolio[133]. - Cash provided by operating activities for the six months ended October 31, 2025, was $292 million, an increase of $163 million from the same period last year[149]. - Cash used for financing activities during the six months ended October 31, 2025, was $399 million, compared to $129 million in the same prior-year period, reflecting increased net repayments of short-term borrowings and share repurchases[151].

Financial Performance - For the six months ended October 31, 2025, the company reported net sales of $2.0 billion, a decrease of 4% compared to the same period last year[106]. - Gross profit for the same period was $1.2 billion, also down 4%, but gross margin increased by 0.3 percentage points to 59.5%[106]. - Operating income decreased by 9% to $565 million, with operating margin declining by 1.5 percentage points to 28.9%[106]. - Diluted earnings per share for the six months ended October 31, 2025, were $0.83, a decrease of 13% from $0.96 in the prior year[107]. - For the six months ended October 31, 2025, net sales totaled $2.0 billion, a decrease of $86 million, or 4%, driven by unfavorable price/mix[124]. - Gross profit for the six months ended October 31, 2025, totaled $1.2 billion, a decrease of $45 million, or 4%, with gross margin increasing to 59.5% from 59.2%[129]. - Operating expenses for the six months ended October 31, 2025, totaled $602 million, an increase of $13 million, or 2%, primarily driven by the impact of a restructuring initiative[132]. - Operating income for the three months ended October 31, 2025, totaled $305 million, a decrease of $36 million, or 10%, compared to the same period last year, with an operating margin decrease of 1.7 percentage points to 29.4%[134]. - For the six months ended October 31, 2025, operating income was $565 million, down $57 million, or 9%, with an operating margin decrease of 1.5 percentage points to 28.9%[135]. - The effective tax rate for the three months ended October 31, 2025, increased to 20.2% from 17.6% year-over-year, primarily due to unfavorable prior fiscal year true-ups[136]. - Diluted earnings per share for the three months ended October 31, 2025, decreased 14% to $0.47, driven by the decrease in operating income[138]. Market Performance - The United States market experienced a 9% decline in net sales, primarily due to the end of the Korbel relationship and the absence of the Sonoma-Cutrer brand[112]. - Emerging markets saw a 10% increase in net sales, with Mexico growing by 17% and Brazil by 22%[112]. - Canada's net sales declined 62% due to volumetric declines in the American whiskey portfolio and JD RTDs, attributed to the absence of American-made beverage alcohol from retail shelves in most provinces[116]. - Mexico's net sales increased 17%, driven by higher volumes and prices of New Mix, although tequila sales declined as consumer preferences shifted to lower-priced products[116]. - Brazil's net sales increased 22%, reflecting higher volumes of JDTA and JDTW, supported by continued distribution expansion and favorable retailer ordering patterns[116]. - Net sales for JDTA increased 16%, primarily due to growth in Brazil and favorable timing of retailer ordering patterns[119]. - Net sales for the Rest of Whiskey increased 54%, driven by the launch of JDTB and growth of The GlenDronach, benefiting from an estimated net increase in distributor inventories in the United States[122]. - Non-branded and bulk's net sales decreased 61%, driven by the decline of used barrel sales as demand and pricing adjusted to current market conditions[121]. - New Mix net sales increased 28%, driven by strong growth in Mexico with market share gains in a growing category[120]. Corporate Actions - Brown-Forman reported a gain of $12 million from the sale of the Alabama cooperage in the first quarter of fiscal 2025[85]. - The company recognized a $13 million franchise tax refund in the first quarter of fiscal 2025 due to a change in tax calculation methodology[86]. - A restructuring initiative was approved, resulting in a workforce reduction of approximately 12% and incurring $16 million in related charges during the first and second quarters of fiscal 2026[87]. - The company ended its sales, marketing, and distribution relationship with Korbel Champagne Cellars effective June 30, 2025, impacting net sales and operating income for the non-comparable period[94]. - Brown-Forman acquired Gin Mare Brand, S.L.U. during fiscal 2023, which included adjustments for fair value changes to contingent consideration liabilities[83]. - The divestiture of Finlandia vodka and Sonoma-Cutrer wine businesses occurred in fiscal 2024, with related transition services agreements impacting financial results[84]. - The company reported a net benefit of $18 million related to the collection of substitution drawback claims filed with the U.S. Government[89]. - Organic changes in financial measures are adjusted for acquisitions, divestitures, and foreign exchange to provide a clearer view of performance[83]. - The company underwent a restructuring initiative, reducing its workforce by approximately 12% and closing the Brown-Forman Cooperage, which negatively impacted operating expenses[104]. - The transition of portfolio distribution in California and 13 additional markets positively impacted net sales in the first quarter of fiscal 2026[105]. - The company divested the Sonoma-Cutrer wine business, which negatively affected net sales and operating income but improved gross margin[102]. - The company anticipates organic net sales and organic operating income to decline in the low-single digit range for fiscal 2026[142]. - Estimated capital expenditures for fiscal 2026 have been updated to a range of $110 to $120 million, down from $125 to $135 million[141]. - Cash provided by operating activities for the six months ended October 31, 2025, was $292 million, an increase of $163 million from the same period last year[149]. - Cash used for financing activities during the six months ended October 31, 2025, was $399 million, compared to $129 million in the same prior-year period, reflecting increased net repayments of short-term borrowings and share repurchases[151]. - The company repurchased 226,600 Class A shares and 3,292,906 Class B shares in October 2025, totaling $99 million, with approximately $134 million remaining available under the repurchase program[154]. Economic Environment - The operating environment remains challenging due to macroeconomic uncertainties, impacting consumer confidence and discretionary spending[106]. - Advertising expense was flat for the three months ended October 31, 2025, while SG&A expense was also flat, reflecting a balance between increased investment in campaigns and lower spending across the portfolio[133].

ULTA BEAUTY ANNOUNCES THIRD QUARTER FISCAL 2025 RESULTS Net Sales Increased 12.9% to $2.9 Billion Compared to $2.5 Billion in the Prior Year Quarter Comparable Sales Increased 6.3% Net Income was $230.9 Million or $5.14 Per Diluted Share Company Increases Fiscal 2025 Guidance Bolingbrook, IL – December 4, 2025 – Ulta Beauty, Inc. (NASDAQ: ULTA) today announced consolidated financial results for the thirteen-week period ("third quarter") and thirty-nine-week period ("first nine months") ended November 1, 202 ...

Financial Performance - Revenue for Q3 fiscal 2026 was $818.4 million, an 8% year-over-year increase, with subscription revenue at $801.0 million, a 9% increase [6]. - Billings for Q3 were $829.5 million, a 10% year-over-year increase [6]. - GAAP net income per diluted share was $0.40, compared to $0.30 in the same period last year [6]. - Free cash flow for Q3 was $262.9 million, up from $210.7 million in the same period last year [6]. - Total revenue for the three months ended October 31, 2025, was $818.35 million, a 8.4% increase from $754.82 million in the same period of 2024 [29]. - Subscription revenue reached $800.96 million, up 9.0% from $734.69 million year-over-year [29]. - Operating income for the three months ended October 31, 2025, was $85.36 million, an increase of 44.5% from $59.03 million in the prior year [29]. - Net income for the three months ended October 31, 2025, was $83.73 million, compared to $62.42 million in the same period of 2024, reflecting a year-over-year increase of 34.2% [29]. - Free cash flow for the nine months ended October 31, 2025, was $787.79 million, indicating strong liquidity after capital expenditures [23]. - Total revenue for the nine months ended October 31, 2025, reached $2,382,640,000, up from $2,200,487,000 in the same period of 2024, indicating an increase of approximately 8.3% [45]. Cash Flow and Assets - Cash and cash equivalents decreased to $583.29 million from $648.62 million at the beginning of the year [31]. - Total assets as of October 31, 2025, were $3.98 billion, a slight decrease from $4.01 billion as of January 31, 2025 [31]. - Total cash provided by operating activities for the nine months ended October 2025 was $787,786, compared to $709,360 for the same period in 2024, indicating a growth of 11.0% [43]. Operating Expenses and Margins - Total operating expenses for the three months ended October 31, 2025, were $562.45 million, up from $539.25 million in the same period of 2024 [29]. - GAAP operating margin improved to 10.4% in Q3 2025 from 7.8% in Q3 2024 [40]. - Non-GAAP operating margin for Q3 2025 was 31.4%, compared to 29.6% in Q3 2024, showing an increase of 1.8 percentage points [40]. Customer and Product Developments - Docusign surpassed 25,000 customers on its AI-native IAM platform, with approximately 150 million opted-in agreements in the Docusign Navigator repository [4]. - Docusign achieved FedRAMP Moderate and GovRAMP authorization in Q3, expanding its identity portfolio [11]. - Docusign Navigator is now available in Brazilian-Portuguese and Spanish, and in Japan [11]. - The company announced new integrations with ChatGPT and other AI platforms at the Docusign Discover'25 developer event [7]. - Docusign received the Salesforce Partner Innovation Award for its Docusign for Agentforce solution during Dreamforce [11]. Profitability Metrics - Gross profit for the three months ended October 31, 2025, was $647.80 million, representing a gross margin of 79.2% compared to 79.3% in the same period of 2024 [29]. - GAAP gross profit for Q3 2025 was $647,804, an increase from $598,283 in Q3 2024, representing a growth of 8.5% [37]. - Non-GAAP gross profit for Q3 2025 reached $669,489, compared to $622,370 in Q3 2024, reflecting a year-over-year increase of 7.6% [37]. - GAAP subscription gross profit for Q3 2025 was $650,586, an increase from $600,106 in Q3 2024, reflecting an 8.4% growth [37]. - Non-GAAP subscription gross margin for Q3 2025 was 83.4%, compared to 84.3% in Q3 2024, showing a slight decline of 0.9 percentage points [37]. Contract Liabilities and Receivables - Contract liabilities and refund liability at the end of the period for October 31, 2025, were $1,479,491,000, compared to $1,332,828,000 at the end of October 31, 2024, showing a growth of about 11.0% [45]. - Contract assets and unbilled accounts receivable at the beginning of the period for October 31, 2025, were $13,824,000, down from $17,461,000 at the beginning of the same period in 2024 [45]. - The total contract assets and unbilled accounts receivable at the end of the period for October 31, 2025, were $13,588,000, compared to $18,341,000 at the end of the same period in 2024 [45]. - The company experienced a decrease in contract assets and unbilled accounts receivable at the end of the period, indicating potential challenges in revenue recognition [45].

Financial Performance - As of October 31, 2025, the Remaining Performance Obligation (RPO) was $857.6 million, with Current RPO (cRPO) at $562.2 million[150]. - The Net Dollar Expansion Rate (NDE) for the trailing 12-month period ending October 31, 2025, was 102.3%, down from 107.3% in the previous year, attributed to increased churn and down-selling[151]. - The company had 145 large customers as of October 31, 2025, compared to 147 large customers a year earlier, defined as those generating at least $1.0 million in subscription revenue[148]. - Subscription revenue for Q3 2025 reached $190,295, a 5% increase from $180,634 in Q3 2024, while professional services revenue increased by 43% to $28,773 from $20,055[170]. - Total revenue for the nine months ended October 31, 2025, was $636,608, up 7% from $593,855 in the same period of 2024[182]. - Gross profit for Q3 2025 was $145,486, compared to $142,840 in Q3 2024, with a gross margin for subscription decreasing to 76% from 80%[172][175]. - Total operating expenses for Q3 2025 were $133,935, a slight decrease from $134,951 in Q3 2024, resulting in an operating income of $11,551, up from $7,889[170]. - Non-GAAP operating income increased by $45.0 million (71%) to $108.5 million, with a non-GAAP operating margin of 17%[198]. - For the three months ended October 31, 2025, the company reported a net income of $2.9 million, down from $10.5 million in the same period of 2024, representing a decrease of 72.2%[199]. - Non-GAAP net income for the three months ended October 31, 2025, was $29.1 million, compared to $25.6 million in 2024, reflecting an increase of 13.5%[199]. Revenue and Cost Structure - Subscription revenue is recognized ratably over the contract term, which typically ranges from one to three years, with a significant portion of sales occurring in the fourth quarter[155]. - Gross margin on subscription revenue is significantly higher than that of professional services revenue, with expectations of a near-term decline due to rising data and hosting costs[160]. - The increase in costs of subscription revenue was primarily due to a $9,677 increase in costs, reflecting a 27% rise compared to the previous year[172]. - Subscription revenue costs increased by $28.2 million (27%) to $130.8 million, primarily due to a $25.9 million rise in third-party data and infrastructure costs[184]. - Professional services revenue costs rose by $12.5 million (21%) to $72.9 million, driven by higher subcontractor and personnel-related costs[185]. - Total costs of revenue increased by $40.7 million (25%) to $203.7 million, impacting overall gross margins[184]. - Gross margin for subscription decreased by 4 percentage points to 77%, while professional services gross margin improved by 5 percentage points to 1%[186]. Expenses and Investments - Research and development expenses are expected to increase in absolute dollars as the company invests in enhancing the Unified-CXM platform[162]. - Research and development expenses increased by 6% to $24,707 in Q3 2025, representing 11% of total revenue, compared to 12% in Q3 2024[176]. - Sales and marketing expenses are anticipated to rise as the company continues to drive business growth while seeking efficiencies[163]. - Sales and marketing expenses decreased by $26.7 million (11%) to $216.7 million, now 34% of revenue, due to reduced personnel-related costs[188]. - General and administrative expenses rose by $1.7 million (2%) to $103.7 million, accounting for 16% of revenue, influenced by increased personnel costs[189]. - Restructuring expenses surged by $12.9 million (435%) to $15.9 million, affecting 12% of the workforce[190]. Cash Flow and Liquidity - Free cash flow for the nine months ended October 31, 2025, was $126.0 million, significantly higher than $57.6 million in 2024, marking a growth of 118.5%[200]. - As of October 31, 2025, the company had $189.6 million in cash and cash equivalents and $290.8 million in highly liquid marketable securities, indicating strong liquidity[201]. - Cash provided by operating activities for the nine months ended October 31, 2025, was $138.5 million, compared to $72.2 million in 2024, an increase of 92.0%[211]. - The company expects to meet its working capital needs and capital expenditures for at least the next 12 months with existing cash and cash equivalents[201]. - The company has material cash requirements totaling $324.8 million in guaranteed purchase commitments through fiscal year 2030, with $107.1 million due within the next 12 months[204]. - The company experienced a $133.4 million decrease in accounts receivable due to collections outpacing billings for the nine months ended October 31, 2025[211]. - The company anticipates fluctuations in free cash flow in future periods due to changes in operating expenses and continued investments in growth[210]. - Cash provided by investing activities for the nine months ended October 31, 2025, was $39.2 million, primarily from $416.0 million in sales and maturities of marketable securities[213]. - Cash used in financing activities for the nine months ended October 31, 2025, was $135.6 million, including $152.3 million for the 2025 Share Repurchase Program[215]. Tax and Accounting - The provision for income taxes increased significantly by 392% to $14,410 in Q3 2025, primarily due to changes in the effective tax rate computation[181]. - Provision for income taxes increased by $22.3 million (223%) to $32.3 million, now 5% of revenue, due to changes in tax rate computations[192]. - The company’s critical accounting estimates include revenue recognition and stock-based compensation expense, which may materially impact financial statements[218]. - There have been no material changes to the company's critical accounting policies and estimates compared to those disclosed in the 2025 10-K[219]. - Market risk exposures include foreign exchange risk and interest rate risk, with no material changes since January 31, 2025[221]. Market and Economic Conditions - The company operates in over 80 countries and its AI-based platform recognizes over 150 languages, indicating a broad global reach[148]. - Macroeconomic conditions, including inflation and geopolitical events, may negatively impact business growth and customer spending on technology[152].