The biggest driver of free cash flow is SaaS deferred revenue and the strength of our software subscription renewals, which typically include upfront payments on multiyear contracts. In Q2, we repurchased an additional $31 million of stock under our repurchase program. And at the halfway point of fiscal year 2024, we have repurchased $82 million of stock, representing 106% of our first half free cash flow. Now I’ll discuss our outlook for fiscal Q3 and the full fiscal year 2024. We continue to believe that ARR and free cash flow to be viewed as primary KPIs of our underlying business momentum. All of our following guidance metrics are based on current foreign currency exchange rates. For fiscal Q3, we expect subscription revenue, which includes both the software portion of term-based licenses and SaaS to be $106 million to $110 million.
This represents 24% year-over-year growth at the midpoint. We expect total revenue to be $206 million to $210 million with year-over-year growth of 7% at the midpoint. At these revenue levels, we expect Q3 consolidated gross margins to be approximately 82.5% and EBIT margins of approximately 21%. As I mentioned on our last earnings call, we are executing some foundational go-to-market changes, which includes amplifying our discrete focus on our land expand opportunities while also scaling our motion to secure our growing subscription renewal base. We will continue to hire field resources and additional inside sales reps focused solely on the SaaS velocity market as we refine our segmentation model. These continuing investments are reflected in our margin guidance.
Our projected diluted share count for fiscal Q3 is 44.7 million shares. Now I would like to give an updated outlook on the full fiscal year 2024, which includes raising both our total revenue and total ARR expectations for the full year. We expect fiscal year 2024 total ARR growth of 14% year-over-year, which reflects a 100 basis point increase over our prior guidance. We now expect subscription ARR, which includes term-based licenses and SaaS to increase 24% year-over-year. From a revenue perspective, we now expect subscription revenue to be in the range of $408 million to $418 million growing 19% year-over-year at the midpoint. At these levels, subscription revenue will exceed over 50% of our total revenues. Our updated guidance reflects a mix shift from subscription revenue due to a lower number of conversions from perpetual support contracts to term software compared to the prior year, as well as continued measured spending for lower multi-year transactions in a relative high interest rate environment.
As a result, we expect total revenue to be in the range of $812 million to $822 million. This is an increase compared to our prior total revenue range of $805 million to $815 million. Our improved fiscal year 2024 total revenue outlook reflects strong renewal activity, the ongoing momentum in our SaaS velocity business and the seasonally stronger trends that we historically see in the second half of the fiscal year. Moving to full year fiscal 2024 margin EBIT and cash flow outlook. We continue to expect consolidated gross margins of 82% to 83% and non-GAAP EBIT margin expansion of 50 basis points to 100 basis points year-over-year. We are also maintaining our expected full year free cash flow of $170 million. As of September 30, we had $174 million remaining on our existing share repurchase authorization, and we expect to continue with our existing practice of repurchasing at least 75% of our annual free cash flows.
We view share repurchases as a primary use of excess cash. Year-to-date, we are pacing well ahead of our annual share repurchase target, and we intend to continue the share repurchase momentum during the current quarter. For additional details and trends on all of our key metrics, please take time to review our Investor deck contained in the Investor Relations section of our website. In closing, we’ve built a durable and multifaceted revenue model that should allow us to exceed ARR, total revenue and earnings objectives over the long-term. We are excited about the future, and we look forward to hooting many of you at our SHIFT events in New York City next week. Operator, you can now open the line for questions.
Q – Aaron Rakers: Yes. Thanks for taking the question. Congratulations on the execution in the quarter. I guess my question is, just help me understand a little bit more. It looks like clearly, your ARR updated guidance is a little bit lower than your prior guide, 24%. On the subscription side, I should say, relative to 27. And then obviously, revenue a little bit lower at the midpoint. Can you just — I know you made some comments in your prepared remarks, but could you unpack that change in the guidance a little bit further?
Gary Merrill : Hey, Aaron, it’s Gary. Good to talk to you this morning. And I think specifically, I think you’re asking about Q3, the Q3 outlook or the full year outlook first. Let me just clarify you are asking.
Aaron Rakers: Yes, I’m talking more full year, the 24% versus prior 27 in the $408 million to $418 million versus the prior $420 million to $430 million.
Gary Merrill : Got it. Okay. Awesome. Well, first of all, let me just reflect a little bit on the first half. We’re really pleased with the first half, especially where we ended up at fiscal Q2 on all of our guided metrics, making sure we accelerated past everything. From a full year perspective, as kind of I thought about the second half in particular, coming off of the first half. I’m also pleased that we did raise our ARR guidance. Previously we — we’re guiding to 13 instead of that to 14 as well as our total revenue also increasing our guidance on total revenue. A lot of that is reflective of a lot of the success even we’re seeing on the SaaS business as well, right? When we drive that SaaS — that SaaS success, and we’re able to hit $131 million of ARR.
