Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Total Revenue | $2.313 billion | up 96% year-over-year |
| U.S. Commercial Revenue | $984 million | up 148% year-over-year |
| GAAP Operating Income | $1.085 billion | 47% margin |
| GAAP Earnings Per Share | $0.44 | Not stated |
Guidance and outlook
- Q4 2026 revenue is expected to be between $2.649 billion and $2.653 billion.
- Q4 2026 adjusted income from operations is expected to be between $1.640 billion and $1.644 billion.
- Full year 2026 revenue guidance is raised to between $8.530 billion and $8.534 billion.
- Full year 2026 U.S. commercial revenue guidance is raised to an excess of $3.559 billion.
- Full year 2026 adjusted income from operations guidance is raised to between $5.245 billion and $5.249 billion.
- Full year 2026 adjusted free cash flow guidance is raised to between $4.8 billion and $5 billion.
How management sounded
Confident (+9 on our -10 to +10 scale). Management expressed extreme confidence, citing record growth rates, raised guidance, and an insatiable market demand for Sovereign AI. Management sounded more upbeat than on 99% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Customer Acquisition
Asked: Dan Ives asked how Sovereign AI bootcamps impact customer conversion.
Answer: Management explained that bootcamps allow customers to see immediate value, shifting the interaction from a long sales cycle to rapid deployment.
Market Strategy
Asked: Gil Luria asked how to convince skeptical CEOs about the need for a diffusion layer.
Answer: Management stated they do not need to convince everyone because demand is currently insatiable and they focus on customers who understand the necessity of their platform.
Government Strategy
Asked: Brad Zelnick asked about the anti-war movement and its impact on government business.
Answer: Management emphasized that their products are built to deter conflict by providing superior capabilities, ensuring adversaries understand the cost of war is too high.
Enterprise Unit
Asked: Analysts asked about the atomic unit of the enterprise.
Answer: Management clarified that the atomic unit is the workflow, not the individual knowledge worker, and their platform integrates AI to drive objective ROI.
What to watch before the next call
- The company's ability to scale resources to meet insatiable demand.
- The sustainability of U.S. commercial growth rates.
- The evolution of contract sizes and durations as Sovereign AI matures.
