AI Takeaway
COO reported Q2 FY2026 revenue growth of 7.9% to $1.08B, but swung to a net loss of $77.9M driven by a 69.5% surge in SG&A expenses that overwhelmed gross profit gains.
Revenue
$1.08B
++7.90% YoY
EPS (Basic)
$-0.40
-190.91% YoY
Gross Margin
68.0%
++0.24% YoY
Operating Income
$-31M
-116.77% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue increased 7.9% year-over-year to $1.0815B in Q2 FY2026 from $1.0023B in the prior-year period, reflecting continued demand for COO's products and services despite a challenging operating environment.
Source: Source: 10-Q Income Statement
Gross profit rose 8.3% to $735.4M, with gross margin holding nearly flat at 68.0% versus 67.8% in the prior year, indicating COO maintained pricing power and cost-of-revenue discipline even as overall expenses surged.
Source: Source: 10-Q Income Statement
SG&A expenses surged 69.5% year-over-year to $676.2M from $399.0M, which is the primary driver of the swing from operating income of $184.8M to an operating loss of $31.0M, representing a 116.8% decline in operating income.
Source: Source: 10-Q Income Statement
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Upgrade to unlockSG&A expenses surged 69.5% YoY to $676.2M in Q2 FY2026, converting a $184.8M operating profit into a $31.0M operating loss. If this elevated cost structure persists or worsens, profitability could remain under significant pressure for multiple quarters.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $1.21 versus the $1.11 analyst consensus — a +9.3% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.08B | $1B | +7.90% |
Cost of Revenue | $346.1M | $323.2M | +7.09% |
Gross Profit | $735.4M | $679.1M | +8.29% |
Operating Income | $-31M | $184.8M | -116.77% |
Net Income | $-77.9M | $87.7M | -188.83% |
EPS (Basic) | $-0.40 | $0.44 | -190.91% |
EPS (Diluted) | $-0.40 | $0.44 | -190.91% |
R&D Expense | $42.5M | $45.5M | -6.59% |
SG&A Expense | $676.2M | $399M | +69.47% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $12.48B | $12.41B | +0.55% |
Current Assets | $2.3B | $2.13B | +8.19% |
Total Liabilities | $4.24B | $4.13B | +2.85% |
Current Liabilities | $1.8B | $1.01B | +78.24% |
Stockholders' Equity | $8.24B | $8.29B | -0.59% |
Cash & Equivalents | $138.8M | $116.2M | +19.45% |
Long-Term Debt | $1.86B | $2.52B | -26.32% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $443.7M | $286.8M | +54.71% |
Investing Cash FlowYTD | $-192.9M | $-176M | -9.60% |
Financing Cash FlowYTD | $-223.7M | $-105.2M | -112.64% |
Share BuybacksYTD | $108M | $40.6M | +166.01% |
D&AYTD | $190.9M | $183.6M | +3.98% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 68.0% | 67.8% | +0.24% |
Operating Margin | -2.9% | 18.4% | -21.30% |
Net Margin | -7.2% | — | — |
ROE | -0.9% | — | — |
ROA | -0.6% | — | — |
Current Ratio | $1.274 | — | — |
Debt to Equity | $0.515 | — | — |
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COO reported a net loss of $77.9M and EPS of -$0.40 in Q2 FY2026, a sharp reversal from net income of $87.7M and EPS of +$0.44 in the prior-year quarter. Whether this beat or missed analyst consensus estimates would require comparison to published Wall Street forecasts, which are not included in the 10-Q filing itself.
COO's Q2 FY2026 net loss of $77.9M was primarily driven by a 69.5% surge in SG&A expenses to $676.2M, up from $399.0M in the prior year. This dramatic cost increase overwhelmed the 8.3% growth in gross profit to $735.4M, turning a $184.8M operating profit into a $31.0M operating loss.
COO's revenue grew 7.9% year-over-year to $1.0815B in Q2 FY2026, up from $1.0023B in the same quarter last year. Gross margin remained nearly flat at 68.0%, indicating the revenue growth was accompanied by stable cost-of-revenue management.
COO's near-term liquidity shows a current ratio of 1.27x, with current liabilities having surged 78.2% YoY to $1.8047B against cash of only $138.8M. However, YTD operating cash flow is strong at $443.7M (+54.7% YoY), and long-term debt declined 26.3% to $1.8595B, suggesting the underlying cash generation remains solid despite the reported GAAP loss.
Based on the financial data, the most prominent risks include the dramatic SG&A cost escalation that drove an operating loss, the 78.2% surge in current liabilities compressing liquidity, and the sustainability of profitability if elevated operating expenses persist. Additionally, the company increased share buybacks by 166% YTD to $108.0M during a period of net losses, which may raise questions about capital allocation priorities.