Q2 net income +31% on below-the-line swing as operations fell 36%; $65M restructuring hit

Filed July 2, 2026 · Period ending May 31, 2026 · Compared to 10-Q Jul 3, 2025 · ~2 min read

Key Changes

• high

  Operating income fell 35.7% to $95.4M while net income rose 31.3% to $55.3M — the earnings gain came from a $66.1M below-the-line improvement (non-operating/other +$70.7M, income tax -$4.6M), not operations.

  MD&A: Other Expense (Income) verify on EDGAR →
• high

  Gross margin compressed 170bp to 33.4% and operating margin fell to 3.9% from 6.1%, driven by $65.5M in restructuring costs (severance for ~20,000 employees) and wage increases.

  MD&A: Gross Margin & Operating Margin verify on EDGAR →
• high

  Technology & consumer electronics vertical (largest) declined 5.8% on client losses; retail/travel/e-commerce grew 9.8% and banking/financial services 12.6%, offsetting weakness.

  MD&A: Revenue by Vertical verify on EDGAR →