v3.26.1
Segment and Geographic Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment and Geographic Information Segment and Geographic Information
The Company operates and manages its business in a single reportable segment, the development and marketing of computer software and related services. The Company defines its chief operating decision maker (“CODM”) to be its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The Company’s reported measures of profit or loss for segment reporting purposes are Net income and Adjusted operating income less operating stock‑based compensation expense (“AOI less Operating SBC”). The CODM is regularly provided Net income and AOI less Operating SBC to understand the Company’s financial and operating results across accounting periods and for comparison of the Company’s results to those of other companies. The CODM regularly reviews AOI less Operating SBC for internal budgeting and forecasting purposes, to evaluate operating performance, and to make decisions on allocation of resources. The CODM does not use segment asset information to evaluate operating performance or allocate resources.
The presentation of Net income is included in the consolidated statements of operations. AOI less Operating SBC is a non‑GAAP financial measure and is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash‑ and equity‑settled retention incentives provided to key employees of acquired companies), integration costs, and realignment expenses (income), for the respective periods.
The Company uses AOI less Operating SBC as its primary performance measure because management believes it better reflects the Company’s core operating results by excluding items that are not indicative of the ordinary operation of its business, including costs arising directly from acquisition activity and the costs of discrete realignment initiatives. Consistent with that objective, the Company refined the measure during 2026: beginning in the first quarter of 2026, the Company expanded its acquisition expenses adjustment to include cash- and equity‑settled retention incentives provided to key employees of acquired companies, and renamed the measure from “AOI less SBC” to “AOI less Operating SBC”; and beginning in the second quarter of 2026, applying the same principle, the Company began adjusting for integration costs incurred to integrate acquired businesses into its operations. The Company continues to adjust for discrete realignment initiatives, and does not adjust for severance or organizational and workforce changes undertaken in the ordinary course of managing its business, which remain reflected in AOI less Operating SBC. Prior period amounts have been revised to conform to the current definition; no integration costs were incurred in periods prior to the second quarter of 2026.
Reconciliation of operating income to AOI less Operating SBC:
Three Months EndedSix Months Ended
June 30,June 30,
2026202520262025
Operating income$88,608 $84,430 $214,868 $199,614 
Amortization of purchased intangibles (see Note 6)
11,554 11,405 23,611 22,849 
Deferred compensation plan
11,661 7,584 10,587 6,338 
Acquisition expenses (1)
2,413 3,350 6,093 6,276 
Integration costs (2)
1,800 — 1,800 — 
Realignment expenses (income) (3)
— — — — 
AOI less Operating SBC$116,036 $106,769 $256,959 $235,077 
Further explanation of certain of the Company’s adjustments in arriving at AOI less Operating SBC are as follows:
(1)Acquisition expenses. The Company incurs expenses for professional services rendered in connection with business combinations, which are recorded in general and administrative expenses in the Company’s GAAP consolidated statements of operations. Also included in the Company’s acquisition expenses are cash- and equity‑settled retention incentives provided to key employees of the acquired companies.
(2)Integration costs. Integration costs are incremental costs incurred to integrate and consolidate acquired businesses with the Company’s existing operations, including where it combines an acquired business with an existing business and consolidate overlapping teams, products, and systems. These costs consist primarily of employee severance and related personnel costs arising from such consolidation, and also include contract termination costs and costs to combine or migrate systems, platforms, and processes, and, to a lesser extent, charges to exit or consolidate facilities or other assets, in each case incurred as a direct result of an acquisition. The Company excludes these costs when evaluating its continuing operational performance because they result from acquisition activity rather than the ordinary course of business. Integration costs do not include costs of discrete realignment initiatives that are not undertaken in connection with an acquisition, which are reported as realignment expenses (income). Integration costs may recur to the extent the Company completes and integrates additional acquisitions.
(3)Realignment expenses (income). Realignment expenses (income) consist of the costs of discrete, significant realignment initiatives that the Company formally approves and that have a defined scope of actions and completion timeline—such as a broad reorganization or workforce-reduction program—including employee severance and related personnel costs and associated facility or asset costs. Such initiatives arise from time to time, and the related costs may recur in future periods. The Company excludes these amounts when evaluating its continuing operational performance because such initiatives are distinct from the ordinary course of business. The Company does not adjust for severance or organizational and workforce changes undertaken in the ordinary course of managing its business, which remain reflected in the measure.
“Headcount‑related” costs are considered the Company’s significant expense category and primarily include salaries, benefits, bonuses, stock‑based compensation expense, employment taxes, travel, training, and realignment and optimization of the Company’s colleagues, and third‑party personnel expenses and related overhead. Certain of these amounts—cash- and equity‑settled retention incentives provided to key employees of acquired companies, integration costs, and the costs of discrete realignment initiatives—are excluded in deriving AOI less Operating SBC, as described in the reconciliation above. The CODM is regularly provided headcount‑related costs to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and to align colleague resources and evaluate compensation to support the Company’s operational efficiency and maximize long‑term growth. Headcount‑related costs of $236,745 and $209,081 for the three months ended June 30, 2026 and 2025, respectively, and $465,087 and $408,690 for the six months ended June 30, 2026 and 2025, respectively, are included in Cost of subscriptions and licenses, Cost of services, Research and development, Selling and marketing, and General and administrative in the consolidated statements of operations.
Under the Company’s Net income measure of profit or loss for segment reporting purposes, other segment items were $95,467 and $84,525 for the three months ended June 30, 2026 and 2025, respectively, and $195,957 and $164,120 for the six months ended June 30, 2026 and 2025, respectively. These other segment items primarily include cloud‑related costs incurred for servicing the Company’s accounts using cloud provisioned offerings and the Company’s license administration platform, channel partner compensation for providing sales coverage to users, marketing costs, acquisition costs, depreciation expense, and amortization expense recorded in Cost of subscriptions and licenses, Cost of services, Research and development, Selling and marketing, and General and administrative in the consolidated statements of operations. Additionally, other segment items include Deferred compensation plan expense (income), Amortization of purchased intangibles, and non‑operating expense (income) amounts presented in the consolidated statements of operations.
Under the Company’s AOI less Operating SBC measure of profit or loss for segment reporting purposes, other segment items were $62,119 and $51,596 for the three months ended June 30, 2026 and 2025, respectively, and $120,697 and $97,125 for the six months ended June 30, 2026 and 2025, respectively. These other segment items primarily include cloud‑related costs incurred for servicing the Company’s accounts using cloud provisioned offerings and the Company’s license administration platform, channel partner compensation for providing sales coverage to users, marketing costs, and depreciation expense recorded in Cost of subscriptions and licenses, Cost of services, Research and development, Selling and marketing, and General and administrative in the consolidated statements of operations. Within the reconciliation of AOI less Operating SBC, cash- and equity‑settled retention incentives provided to key employees of acquired companies included as a component of acquisition expenses totaling $2,373 and $3,340 for the three months ended June 30, 2026 and 2025, respectively, and $6,035 and $6,244 for the six months ended June 30, 2026 and 2025, respectively, are excluded from the calculation of headcount‑related costs. Additionally, within the reconciliation of AOI less Operating SBC, integration costs of $1,800 for both the three and six months ended June 30, 2026 are excluded from the calculation of headcount‑related costs.
Revenues by geographic region are presented in Note 3. Long‑lived assets (other than goodwill), net of depreciation and amortization by geographic region (see Notes 5, 6, and 8) are as follows:
June 30, 2026December 31, 2025
Americas (1)
$195,971 $213,352 
EMEA32,534 31,684 
APAC25,327 15,154 
Total long-lived assets$253,832 $260,190 
(1)Americas includes the U.S., Canada, and Latin America (including the Caribbean).