Revenue Slight Decline Offset by Margin Expansion
Total revenue declined 1.5% YoY to $1.51B, yet gross profit grew 2.0% to $1.09B as gross margin expanded 246 basis points to 71.9%, reflecting a favorable shift in revenue mix and a 9.6% reduction in cost of revenue from $475.0M to $429.3M.
Operating Income and Margin Improvement
Operating income rose 13.7% YoY to $316.1M, with operating margin expanding approximately 280 basis points to 20.9%, as SG&A expenses remained nearly flat at $726.3M (-0.5% YoY), demonstrating effective cost management relative to revenue.
Strong Operating Cash Flow Generation
Operating cash flow increased 24.7% YoY to $391.0M, significantly outpacing net income of $222.3M, indicating high earnings quality and strong cash conversion. Free cash flow (operating cash flow less capex implied by investing activities) was robust, supporting capital return activities.