The company is focused on growing service revenues, which increased 5.1% and 6.3% for the three and six months ended March 31, 2024, respectively. The company is working to renew maintenance agreements and realize price increases.

During the second quarter of fiscal 2024, the Company completed two acquisitions. The acquired assets and assumed liabilities of the acquisitions were not material and the Company recorded $23.6 million of goodwill as a result of the acquisitions.

The company initiated a restructuring plan to match strategic and financial objectives and optimize resources for long-term growth, including a reduction in force program. The company recorded restructuring charges of $8.6 million and $8.7 million, net of adjustments, related to reductions in workforce that are reflected in our results for the six months ended March 31, 2024 and March 2023, respectively.

Operating expenses decreased $41.2 million, or 9.3% for the six months ended March 31, 2024 from the comparable period in the prior year. The decrease in sales and marketing expense for the three and six months ended March 31, 2024 was primarily due to a decrease of $14.3 million and $34.9 million, respectively, in personnel costs from the comparable periods in the prior year.

The company reduced headcount in sales and marketing, research and development, and general and administrative functions. Sales and marketing headcount at the end of March 2024 decreased to 2,166 from 2,480 at the end of March 2023.

The effective tax rate was 18.4% and 19.6% for the three and six months ended March 31, 2024, respectively, compared to 25.1% and 24.8% for the three and six months ended March 31, 2023, respectively. The decrease in the effective tax rate for the three and six months ended March 31, 2024, as compared to the three and six months ended March 31, 2023, is primarily due to the tax impact of stock-based compensation.

There have been no material changes to our risk factors from those described in Part 1, Item 1A, 'Risk Factors' of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, which was filed with the Securities and Exchange Commission on November 14, 2023.

Uncertain economic conditions, including inflation, higher interest rates, slower growth, fluctuations in foreign exchange rates, and other changes in economic conditions, may adversely affect our results of operations and financial performance.

The Company is subject to a variety of legal proceedings, claims, investigations, and litigation arising in the ordinary course of business, including intellectual property litigation. Management believes that the Company has meritorious defenses to the allegations made in its pending cases and intends to vigorously defend these lawsuits; however, the Company is unable to currently determine if an unfavorable outcome is probable or estimate any potential amount or range of possible loss of these or similar matters.

In fiscal 2023 and into the first half of fiscal 2024, continued customer budget constraints brought on by uncertainties in the macroeconomic environment have led to delays in customer purchase decisions. The impact of these buying patterns led to softer demand for both our software and systems products and services.

The fact that demand for our products and services stems from the growth of applications and APIs is a factor that leads the company to believe that the current demand environment is temporary.

Our stronger than normal maintenance renewals signal delays in purchases as customers extend their maintenance contracts over the products they currently own. We believe this softer demand for new products is brought on by the current macroeconomic uncertainties and related customer budget constraints, rather than architectural shifts or losses to competitors.

Cost of net product revenues decreased $14.5 million, or 14.5% for the three months ended March 31, 2024 and decreased $30.6 million, or 15.4% for the six months ended March 31, 2024 from the comparable periods in the prior year primarily due to a decrease in systems revenue.

For the three and six months ended March 31, 2024, cost of net service revenues as a percentage of net service revenues was 14.6% and 14.3%, respectively, compared to 15.4% and 15.5% for the comparable periods in the prior year, respectively.

Professional services headcount at the end of March 2024 decreased to 1,049 from 1,072 at the end of March 2023.

As a component of net product revenues, software revenues increased 20.2% and 9.9% for the three and six months ended March 31, 2024, respectively, from the comparable periods in the prior year.

Research and development expenses decreased $19.2 million, or 13.6% for the three months ended March 31, 2024 and decreased $41.9 million, or 14.8% for the six months ended March 31, 2024 from the comparable periods in the prior year.

Research and development headcount at the end of March 2024 decreased to 1,981 from 2,212 at the end of March 2023.

The Company repurchased shares of its common stock under its share repurchase program. As of March 31, 2024, the Company had $672.4 million remaining authorized to purchase shares under its share repurchase program.

Cash used in financing activities was $236.1 million for the six months ended March 31, 2024, primarily consisted of $250.0 million of cash used to repurchase shares of common stock.

Cash and cash equivalents, short-term investments and long-term investments totaled $909.8 million as of March 31, 2024.

On March 6, 2024, Scot Rogers, EVP, General Counsel, adopted a written plan intended to satisfy the affirmative defense of Rule 10b5-1(c) that is designed to be in effect until March 6, 2025 with respect to the sale of 9,270 Company shares.

Our overall performance depends in part on worldwide economic and geopolitical conditions and their impacts on customer behavior. Uncertain economic conditions, including inflation, higher interest rates, slower growth, fluctuations in foreign exchange rates, and other changes in economic conditions, may adversely affect our results of operations and financial performance.

International revenues represented 46.6% and 48.0% of total net revenues for the three and six months ended March 31, 2024, respectively.