“As we are getting closer to the completion of our SaaS transition, we expect the positive trend of maintenance and services revenues to continue to decline.”

In context

“o drive durable growth post transition. In second quarter, ARR was $693.2 million, increasing 19% year-over-year. And year-to-date, we generated $82.7 million of free cash flow, up from $67.3 million in the same period last year. In the second quarter, total revenues were $152.2 million up 17% year-over-year. During the quarter, as compared to the same quarter last year, we had approximately a 7% headwind so our year-over-year revenue growth rate as a result of having increased SaaS sales in our booking mix, which are recognized ratably versus the upfront recognition of our on-prem subscription products. SaaS revenues were $105.9 million. Term license subscription revenues were $32.4 million and maintenance and services revenues were $13.9 million as our renewal rates were again over 90%. As we are getting closer to the completion of our SaaS transition, we expect the positive trend of maintenance and services revenues to continue to decline. Moving down the income statement. I'll be discussing non-GAAP results going forward. Gross profit for the second quarter was $122.6 million, representing a gross margin of 80.6% compared to 84.1% in the second quarter of 2024. Our gross margin continues to track ahead of our expectations, and we feel very confident in our long-term target set at our Investor Day. Operating expenses in the second quarter totaled $124.5 million. As a result, second quarter operating loss was negative $1.9 million or an operating margin of negative 1.2%. This compares to an operating income of $2.1 million or an operating margin of 1.6% in the same period last year. During the quarter, as compared to the same quarter last year, we had approximately a 6% headwind to our operating margin as a result of having”