Alex Zukin

Alex Zukin asked for more details on the significant jump in contribution from new products to net new ACV, seeking to understand what drove this inflection. He also questioned the drivers of sequential growth in net new ARR in Q3, specifically regarding the impact of the First Student deal.

Answer

Sanjit Biswas, CEO and Co-founder, Samsara, explained that the increase in new product contribution was balanced across several products launched earlier in the year, following initial customer trials. Dominic Phillips, CFO, Samsara, clarified that Q3's strength was broad-based, driven by record large customer additions and emerging product uptake, with the First Student deal contributing more ARR in Q2 than Q3.

Alex Zukin inquired about the traction of new product launches, specifically which ones are moving fastest from interest to deployment, and how net new ACV growth from these products is trending for the full year. He also asked about the drivers behind the strong Q2 net new ARR performance, including macro factors, new product impact, and linearity of slipped deals, and the outlook for the second half.

Answer

Sanjit Biswas (CEO) highlighted positive momentum for routing, commercial navigation, maintenance, and asset tags, noting trials and pilots across industries. Dominic Phillips (CFO) confirmed 8% of new ACV came from these applications. Dominic also explained that Q2's strong net new ARR was partly due to Q1 deals closing, strong large customer momentum with $1 billion ARR from $100k+ customers, and a record 17 new $1M+ ARR customers.

Alex Zukin of Wolfe Research LLC inquired about the nature of elongated sales cycles, asking if deals that closed in May retained their original size and scope, and about the current state of pipeline construction. He also asked about the expanded opportunities and competitive positioning resulting from new OEM partnerships.

Answer

Chief Financial Officer Dominic Phillips confirmed that the deals that closed in May did not change in construction, describing the Q1 slip as a multi-million dollar impact. He also noted record pipeline generation in Q1, signaling strong customer demand despite macro uncertainty. Co-Founder and CEO Sanjit Biswas added that the OEM partnership strategy is focused on reducing customer friction by making it easier to connect new assets to Samsara's cloud platform.

Alex Zukin followed up with a nuanced question on billings, asking about the delta in the Q4 billings guide, how much of the raise is operational outperformance versus FX or one-time factors, and the underlying run-rate billings growth.

Answer

Blake Grayson (CFO, DocuSign) explained that the full-year billings guide was raised by $44 million, reflecting operational performance flowing into Q4. He reiterated that billings, including early renewals, will always be part of the metric, but the focus is on the health of the business and expansion within those renewals, pointing to Q3's underlying growth as an indicator.

Alex Zukin asked if IAM is driving early renewal strength and expansions among existing customers, shifting from its previous skew towards new users. He also inquired about the impact of changes in search and SEO on Docusign's top-of-funnel dynamics.

Answer

CFO Blake Grayson confirmed that IAM is contributing to early renewal strength and expansions, noting higher gross retention rates for IAM customers, though it's still early days. CEO Allan Thygesen stated no current impact from SEO/search changes, highlighting Docusign's strong brand and organic traffic, and emphasized that the biggest opportunity is upselling existing e-signature customers to IAM.

Alex Zukin asked about the confidence and direction of travel for Snowflake's expansion rate, particularly as customers leverage the AI and multi-product portfolio. He also asked Brian Robbins about the timing of large deals, comparing Q2's 'one-time bump' from large deals to Q3's four large deals, and if their timing affected the beat magnitude.

Answer

Sridhar Ramaswamy, CEO, described a 'virtuous cycle' where customers expand use cases, gain value, and build confidence, noting that AI adoption is made easy on Snowflake without requiring pre-commits. He clarified that large deals don't immediately impact revenue, often leading to initial discounts. Brian Robbins, CFO, reiterated that product revenue is the leading indicator, and quarterly beats are less significant than the raised full-year guidance, which reflects improved business trends.

Alex Zukin asked about the confidence and direction of Snowflake's expansion rate, particularly how AI portfolio leverage and multi-product adoption influence consumption patterns. He also asked CFO Brian Robbins about the timing of large deals and their impact on the magnitude of quarterly revenue beats.

Answer

CEO Sridhar Ramaswamy described a virtuous cycle where initial deals lead to expanded use cases, driven by the ease of AI adoption on Snowflake's platform, which offers existing governance and a risk-free consumption model. He clarified that large deals typically don't have an immediate positive revenue impact and are not directly tied to quarterly consumption. CFO Brian Robbins reiterated that product revenue is the leading indicator, and the full-year guidance best reflects long-term business trends, noting an improved business view over the last 90 days.

Alex Zukin from Wolfe Research, LLC sought to understand the drivers behind the consumption acceleration, asking whether it was a normalization of the demand environment or more attributable to Snowflake being included in new AI budgets and new products unlocking spend.

Answer

CEO Sridhar Ramaswamy clarified that while the core analytics business remains the strong foundation, there is a clear trend of AI influencing customer decisions. He noted that large customers are allocating specific budgets for AI projects on Snowflake, and that AI was involved in nearly 25% of all deployed use cases in Q2. He expects this trend to continue and accelerate, becoming an increasingly significant growth driver.

Alex Zukin asked CJ Desai where his specific skill set and network could make the most significant impact on MongoDB's growth and inflection points over the next 12 to 24 months. He also sought clarification on the landing strategy for AI-native companies, specifically whether MongoDB is leading with Voyage AI, Atlas, or a combination of both.

Answer

CJ Desai, President and CEO, identified two primary areas for his personal impact: deepening penetration within Fortune 500 and Global 2000 enterprises through his relationships with technology leaders, and cultivating relationships with AI-native companies in Silicon Valley. He provided examples of AI-native companies adopting Atlas due to scaling issues with alternatives, and others starting with Voyage AI embeddings before considering broader MongoDB platform adoption for vector and operational databases.

Alex Zukin of Wolfe Research asked CJ Desai about his specific skill set and network's ability to make the biggest impact in the next 12-24 months, focusing on incremental growth and inflection. He also asked about the landing strategy for AI-native companies, specifically whether they are landing with Voyage AI or Atlas.

Answer

CJ Desai, President and CEO, identified two key impact areas: penetrating Fortune 500 and Global 2000 companies at a higher rate, leveraging his personal relationships with technology leaders, and planting seeds with AI-native companies in Silicon Valley, utilizing his venture and tech network. He provided examples of AI-native companies moving to MongoDB due to scaling issues with alternatives like Postgres, and others starting with Voyage AI embeddings before considering replacing their vector DB and operational database with MongoDB.

Alex Zukin asked for more nuance on the AI use cases and platform differentiators driving market share gains, and when this might materially impact growth. He also questioned how the company successfully balances significant margin outperformance with simultaneous investments for growth.

Answer

President & CEO Dev Ittycheria reiterated that AI's contribution is not yet material but highlighted MongoDB's architectural advantages with JSON, integrated vector search, and embedded Voyage models. He noted enterprise AI adoption is still early. CFO Mike Berry explained the balance of growth and profitability is achieved because revenue growth is the primary driver of margin expansion. He credited a company-wide effort to reallocate spending to high-ROI opportunities while investing in growth.

Alex Zukin asked about Workday's confidence in next year's 13% growth rate post-Analyst Day, specifically regarding customer budgets, demand environment, and propensity to allocate AI budget to Workday. He also inquired about the inorganic contribution to next year's 13% guide and the future pace of M&A.

Answer

CEO Carl Eschenbach reiterated confidence in the approximate 13% subscription revenue guide for next year, citing momentum from acquired companies, organic innovation, and expansion into new markets (Middle East, India, Public Sector globally). CFO Zane Rowe estimated acquired revenue contributes roughly one point to next year's growth, emphasizing a high bar for M&A based on technology, culture, and integration.

Alex Zukin asked about Workday's confidence in the 13% growth rate for next year, specifically if anything since Analyst Day (budgets, demand, AI allocation) provides more confidence. He also asked about the inorganic contribution to next year's guide and the future M&A pace.

Answer

Carl Eschenbach (CEO, Workday) reiterated confidence in the 13% subscription revenue guide for next year, citing momentum from acquired companies, organic innovation, and expansion into new markets (Middle East, India, public sector globally). Zane Rowe (CFO, Workday) estimated acquired revenue contributes approximately one point to next year's growth, emphasizing significant synergy. He stated no change in the high bar for M&A, focusing on technology, culture, and integration.

Alex Zukin asked Eric Yuan about Zoom's AI monetization strategy for the current and coming quarters, and Michelle Chang about whether deferred revenue being slightly below guidance's high end was due to any shifts between quarters.

Answer

Eric Yuan, Founder and CEO, detailed AI monetization across elevating Zoom Workplace with AI (AI Companion usage, Custom AI Companion sales, new online SKUs) and vertical services (Contact Center, Virtual Agent, Revenue Accelerator). Michelle Chang, CFO, clarified that deferred revenue ended within the expected range with no specific shifts to call out.

Alex Zukin asked about Zoom's AI monetization strategy for current and upcoming quarters, and sought clarification on deferred revenue being slightly below the high end of guidance but with a strong outlook for the next quarter.

Answer

CEO Eric Yuan highlighted AI monetization across the entire product portfolio, including Custom AI Companion, new SKUs for AI Companion online, and vertical services like Zoom Contact Center's Virtual Agent and AI Assistant. CFO Michelle Chang stated that deferred revenue ended at the upper end of the range with consistent Q4 guidance, noting no specific call-outs or shifts.

Alex Zukin from Wolfe Research asked how AI adoption is influencing the monetization timeline and competitive positioning, and also questioned if any headwinds in CRPO or billings metrics might contradict the strong revenue performance.

Answer

Founder & CEO Eric Yuan stated that AI Companion acts as a platform to empower other products, helping win deals in areas like Contact Center. CFO Michelle Chang noted a partial abatement of deal scrutiny seen in Q1. Regarding RPO, she explained that while the 5% growth is strong, it is lapping a very high comparable from the prior year, which affects the year-over-year metric.

Speaking for Alex Zukin, an analyst asked for more detail on the deal sizes driving Zoom Contact Center's growth to a triple-digit million ARR business and inquired about the competitive landscape, specifically regarding greenfield versus replacement deals.

Answer

CEO Eric Yuan reported that Contact Center customer count grew 65% year-over-year and noted that none of the top 10 deals in Q1 were replacements of existing cloud-based vendors, implying a focus on on-premise migrations and greenfield opportunities. He also highlighted that channel partners drove 6-7 of the top 10 deals. CFO Michelle Chang added there was a 10% year-over-year mix shift towards the AI-centric Elite SKU.

Alex Zukin asked about the margin leverage and efficiencies derived from deploying AI, as well as other durable efficiencies contributing to Intuit's sustained margin outperformance.

Answer

CFO Sandeep Aujla affirmed confidence in scaling margins through efficiency, economies of scale, and disciplined capital allocation. He detailed how AI improves productivity across technology, salesforce, time to market, customer success, finance, legal, and HR. He emphasized a culture of continuous learning and disciplined spend management, scaling effective initiatives and discontinuing ineffective ones.

Alex Zukin inquired about the sources of margin leverage and efficiencies Intuit is experiencing from increased AI deployment and other durable operational improvements, given consistent outperformance in margins over recent quarters.

Answer

Intuit CFO Sandeep Aujla expressed confidence in scaling margins through efficiency, economies of scale, and disciplined capital allocation. He highlighted AI's role in improving productivity across the technology organization, salesforce, time to market for code rollout, and customer success, as well as in finance, legal, and HR. Aujla emphasized that margin expansion is driven not just by AI efficiencies but also by a culture of learning, scaling successful initiatives, and discontinuing ineffective ones, demonstrating consistent discipline in spend management.

Alex Zukin of Wolfe Research LLC asked about the strategy to mix-shift customers to higher service tiers using new AI functionality, whether it's a 'push' or 'pull' dynamic, and if it can be achieved with margin expansion.

Answer

CEO Sasan Goodarzi described the opportunity as helping customers consolidate their disparate apps and data onto Intuit's all-in-one platform, which a Forrester study showed can yield a 300% ROI. He characterized the strategy as both a 'push' and a 'pull.' The AI agents create a 'pull' by demonstrating value and encouraging organic adoption. Concurrently, Intuit will 'push' customers by evolving its product lineup to inspire consolidation and overcome inertia, effectively creating an ERP-like system for SMBs.

Patrick, on behalf of Alex Zukin, asked for the drivers behind Credit Karma's significant outperformance and why annual guidance was not updated despite strong first-half results.

Answer

CEO Sasan Goodarzi attributed Credit Karma's growth to both macro improvement (40%) and strong execution (60%) within the "one consumer platform" strategy, which integrates TurboTax and improves the shopping experience for financial products. CFO Sandeep Aujla added that the company faces more challenging year-over-year comps for Credit Karma in the second half of the year. Both executives confirmed they will re-evaluate full-year guidance after Q3, which is their standard practice.

Alex Zukin asked about the expected duration of the non-AI cohort acceleration trend, given strong forward-looking metrics like billings, RPO, and CRPO. He also inquired about the progression of gross margins and gross profit dollar growth, especially with the AI cohort acceleration, despite the largest customer receiving better unit economics.

Answer

CEO Olivier Pomel expressed confidence in the midterm to long-term trends of digital transformation and cloud migration, acknowledging that short-term consumption ebbs and flows are harder to predict. CFO David Obstler attributed gross profit dollar acceleration to cloud platform efficiency efforts and the balance between volume discounts for large customers and the influx of many smaller new customers, reiterating the long-standing gross margin target of plus or minus 80%.

Alex Zukin asked about the expected duration of the acceleration trend in the non-AI cohort, given strong forward-looking metrics like billings, RPO, and CRPO. He also inquired about the progression of gross margins and gross profit dollar growth, especially considering the largest customer's improved unit economics and the acceleration of the AI cohort.

Answer

Olivier Pomel, Co-Founder and CEO, Datadog, stated that while consumption ebbs and flows are hard to predict, the midterm and long-term motion of digital transformation and cloud migration remains steady. David Obstler, CFO, Datadog, highlighted engineering efforts for cloud platform efficiency and a broad customer base balancing volume discounts, reaffirming the company's commitment to maintaining a gross margin of approximately 80%.

Alex Zukin asked about the potential impacts of the OpenAI integration on top-of-funnel, cross-sell, or revenue uplift over the next 12-18 months, and for insights into the trajectory of net dollar retention for the upcoming quarters.

Answer

Dylan Field, Co-founder and CEO of Figma, stated it's early days for the ChatGPT integration, which focuses on FigJam diagramming, allowing users to iterate in ChatGPT and then refine in Figma. He noted user excitement and time savings but no monetization details yet, with active discussions with OpenAI. Praveer Melwani, CFO of Figma, attributed the net dollar retention increase to 131% for the $10,000+ cohort (up 2 points quarter-over-quarter) to the platform approach, pricing/packaging benefits, and new product functionality, while acknowledging tougher comparisons from the 2024 Dev Mode rollout.

Alex Zukin asked about the impact of AI functionality, Airbase monetization, and cross-selling on client retention rates (currently 92%+), and how retention might evolve towards long-term targets. He also sought comments on the company's view of organic versus inorganic innovation one year post-Airbase acquisition.

Answer

Executive Chairman Steve Beauchamp and President and CEO Toby Williams stated that broadening product offerings and world-class service drive positive retention, which they expect to continue. They noted Airbase's success as a proof point for acquisitions but affirmed no strategic shift in capital allocation, maintaining a balance of organic innovation and strategic M&A, with Airbase being the largest acquisition to date.

Alex Zukin from Wolfe Research asked about the potential evolution of Paylocity's retention rates (currently 92%+) as the company sells more AI functionality, monetizes Airbase, and cross-sells products, inquiring if retention is expected to increase towards long-term targets. He also sought Paylocity's updated view on organic versus inorganic innovation, particularly given the successful integration and market expansion from the Airbase acquisition.

Answer

Steve Beauchamp, Executive Chairman, expressed satisfaction with the Airbase acquisition as a proof point but clarified no strategic shift in M&A, maintaining a focus on organic innovation while remaining open to strategic acquisitions. He stated that broadening product offerings and providing world-class service is a recipe for positive retention results over time, noting current retention remains above 92%. Ryan Glenn, Chief Financial Officer, added that Airbase's success, as their largest acquisition, boosts confidence in future similar endeavors.

Alex Zukin of Wolfe Research LLC asked which Airbase features are driving the most cross-sell interest, about potential gross margin impacts, and for the expected revenue contribution from Airbase in fiscal 2026.

Answer

Executive Chairman Steve Beauchamp identified expense management as the module with the highest adoption, often serving as the entry point. CFO Ryan Glenn stated that Airbase's margin profile is not materially different from the core business and that its revenue contribution, while growing, remains a small portion of the total.

An analyst on for Alex Zukin asked about the pricing strategy for new CFO products and the latest trends in sales hiring and productivity.

Answer

Executive Chairman Steven Beauchamp explained that pricing for products like Airbase will align with models common to the CFO suite, separate from the HCM PEPY model, and that this has been received well. President and CEO Toby Williams reiterated the focus on driving productivity from the existing sales force with modest headcount growth, a strategy that has proven effective and will likely inform the FY26 plan.

Alex Zukin asked about demand trends and linearity of bookings throughout the quarter, the consumption and utilization of AI credits, and the potential impact of the Q4 renewal cohort on cRPO growth and Pro Plus expansion.

Answer

CEO Bill McDermott described demand as 'amazing' and 'better than I've ever seen it,' citing oversubscribed world forums and a clear C-suite understanding of the AI platform. He noted historically consistent linearity and a 55x growth in assists since May. CFO and President Gina Mastantuono explained that proactive renewal pull-ins from Q4 boosted Q3 cRPO and provided strong momentum for Q4, with improving Pro Plus attach rates.

Alex Zukin asked about demand trends and linearity of bookings throughout the quarter, the consumption and utilization of AI credits, and the potential impact of the Q4 renewal cohort on cRPO growth and Pro Plus expansion.

Answer

CEO Bill McDermott described demand as 'amazing' and 'better than I've ever seen it,' citing oversubscribed world forums and a clear C-suite understanding of the AI platform. He noted historically consistent linearity and a 55x growth in assists since May. CFO and President Gina Mastantuono explained that proactive renewal pull-ins from Q4 boosted Q3 cRPO and provided strong momentum for Q4, with improving Pro Plus attach rates.

Alex Zukin of Wolfe Research LLC inquired about the drivers behind ServiceNow's strong execution amid a tough macro environment and sought clarity on the conservatism baked into the guidance for the U.S. federal sector.

Answer

Chairman & CEO Bill McDermott credited the outperformance to the company's culture and the transformative impact of its Agentic AI platform, which is driving customer consolidation. President & CFO Gina Mastantuono added that the federal sector performed as expected and that the forward guidance prudently accounts for ongoing budget tightening in that vertical.

Alex Zukin asked about common usage patterns among the 21 AI-native customers with over $100,000 ARR, specifically if their AI products are built around Kafka or Apache Flink. He also sought insights into potential cloud revenue step-down for the next fiscal year, considering Q4 headwinds that might reverse, RPO acceleration, and optimization stabilization.

Answer

CEO Jay Kreps explained that AI-native companies use Confluent for general tech needs and AI-specific use cases like data flow for suggestions, recommendations, and actions, emphasizing the need for ongoing evaluation and real-time analytics. CFO Rohan Sivaram stated that fiscal year 2026 guidance is not yet available but advised considering late-stage pipeline momentum, normalized optimization, Flink's growth, and the low single-digit Q4 impact from a large customer when modeling.

Alex Zukin from Wolfe Research LLC inquired about the drivers behind Adobe's strong Q3 performance, specifically bifurcating the impact of AI-first products versus core pricing and quantity, and the company's confidence in sustaining double-digit Digital Media ARR growth. He also asked about Adobe's strategy to help CMOs adapt to the evolving LLM-based discovery landscape and the best-positioned portfolio segments.

Answer

Shantanu Narayen, Chairman & CEO, expressed confidence in the creative opportunity and differentiated solutions, noting broad-based monetization across AI-first and existing products. David Wadhwani, President of Digital Media Business, detailed contributions from Creative Cloud Pro migration, new user acquisition via Firefly, and strong performance in Business Pro and Consumer with AI Assistant and Acrobat Studio. Anil Chakravarthy, President of Digital Experience Business, highlighted the Adobe Experience Platform and apps, Gen Studio, and LLM Optimizer as key to helping CMOs strengthen direct consumer relationships and adapt to new discovery funnels. Shantanu Narayen further emphasized the importance of owned sites, personalized experiences, and content velocity driven by Gen Studio.

Alex Zukin asked if Q3 marked a turning point for Adobe, given flat or growing Net New Digital Media ARR, a raised guide, and exceeding AI-first ARR targets early. He sought clarification on whether this was driven more by AI-first product adoption or core PxQ, and confidence in sustained double-digit DM ARR growth. He also followed up on Adobe's role in helping CMOs adapt to the web's shift from search to LLM-based discovery, identifying which portfolio parts are best positioned and when this impact will be visible in the Digital Experience book of business.

Answer

Shantanu Narayen, Chair and CEO, expressed confidence in the creative opportunity and differentiated solutions, affirming strong aspirations for the digital creative business and increased confidence in execution and monetization. David Wadhwani, President of Digital Media, detailed broad strength across creative professionals (driving Creative Cloud Pro migration), creators (attracting new users via third-party models and integrated workflows), business professionals/consumers (AI Assistant, Acrobat Studio), and enterprise creative automation (Gen Studio). Shantanu added that 25% YoY MAU growth for Creative + Acrobat shows demand, and Express offers a unique conversational AI approach. Regarding the LLM shift, Shantanu explained that Adobe Experience Platform and apps will see a tailwind as brands strengthen direct consumer relationships. He highlighted Adobe Experience Manager for conversational owned sites, AEP for personalization at scale, and Gen Studio for increased content creation velocity, noting that DX subscription revenue is growing significantly faster than competitors at scale.

Alex Zukin noted the strong Q3 performance, including flat to growing Net New DM ARR and exceeding AI-first ARR targets, asking for a bifurcation of growth drivers between AI-first products and core PxQ, and confidence in sustained double-digit DM ARR growth. He also asked about Adobe's role in helping CMOs adapt to LLM-based information discovery, which portfolio parts are best positioned, and when this will impact the DX book of business.

Answer

Shantanu Narayen, Chair and CEO, expressed confidence in the creative opportunity and differentiated solutions, affirming strong aspirations for the digital creative business. David Wadhwani, President of Digital Media, detailed broad momentum from Creative Cloud Pro migrations driven by AI usage, new user acquisition via Firefly, strong contributions from Acrobat AI Assistant and Acrobat Studio, and creative automation through Gen Studio in enterprises. Shantanu Narayen further explained that Adobe Experience Platform and apps, Gen Studio, and Adobe Experience Manager are well-positioned to help CMOs adapt to LLM-driven discovery by enabling direct consumer relationships, personalized content, and conversational owned sites, noting strong subscription revenue growth in DX.

Alex Zukin from Wolfe Research LLC posed a two-part question about competition: first, regarding the down-market environment with Adobe Express's growth, and second, on the 'coopetition' with vendors like Meta and how GenStudio partners with their ad tools.

Answer

David Wadhwani, President of Digital Media, addressed the first part by highlighting Express's integration into the broader enterprise content supply chain, which drives adoption. On the second part, CEO Shantanu Narayen and Anil Chakravarthy, President of Digital Experience, explained that ad platforms like Meta seek partnerships with Adobe. They stated GenStudio helps advertisers optimize creative and ROI, making Adobe a key partner for creating and deploying content across all major ad channels.

Alex Zukin asked if the new Oracle AI Database truly unlocks the general enterprise inferencing market, inquiring about the expected adoption pace over the next few years, how quickly enterprise customers will begin interrogating their data in this new fashion, and whether current supply constraints are hindering this demand.

Answer

Larry Ellison (Chairman and CTO) confirmed that the Oracle AI Database is indeed a game-changer for the enterprise inferencing market, predicting 'insatiable' demand. He highlighted that the database addresses critical customer concerns by securely enabling AI on private data through vectorization and bundling with leading LLMs (ChatGPT, Gemini, Grok, Llama) available in the Oracle Cloud. This allows customers to combine public and private data for complex queries without compromising security. Safra Catz (CEO) added that this innovation will accelerate the migration of Oracle databases, which dominate the enterprise market, to the cloud (public, dedicated regions, or Cloud@Customer), allowing enterprises to leverage AI for their proprietary data. Both executives indicated Oracle is well-positioned to meet this demand over the coming years.

Alex Zukin inquired about the pacing and adoption of the Oracle AI Database in opening up the general enterprise inferencing market, including customer readiness and the impact of current supply constraints.

Answer

Chairman & CTO Larry Ellison and CEO Safra Catz emphasized the "insatiable" demand from enterprises to use AI on their private, secure data. They highlighted the Oracle AI Database's ability to vectorize data, its robust security models, and its bundling with leading LLMs, facilitating the migration of traditional Oracle databases to the cloud.

Alex Zukin inquired about the potential of the new Oracle AI Database to open up the general enterprise inferencing market, the expected pace of adoption by sophisticated customers, and how current supply constraints might impact this demand.

Answer

Chairman and CTO Larry Ellison affirmed that the demand for using AI on private data is 'insatiable,' with CEOs and heads of government now engaging. He explained that Oracle's AI database allows for secure vectorization of all data and is bundled with leading LLMs (Gemini, Grok, ChatGPT, Llama) in the Oracle Cloud, enabling customers to ask any question about their combined private and public data without compromising security. CEO Safra Catz added that this innovation will drive the migration of Oracle databases to the cloud, both public and dedicated regions, allowing enterprises to leverage AI for their own data with their preferred LLMs.

Alex Zukin inquired about the current demand environment, linearity within the quarter for large deals, the deceleration in billings, and the expected progression of Net Dollar Retention (NDR) for the remainder of the year.

Answer

Co-CEO Roy Mann and CFO Eliran Glazer addressed the questions. They noted strong overall demand, particularly upmarket, but acknowledged some softness in the downmarket segment due to Google algorithm changes. Glazer stated that calculated billings are an imperfect metric and the company focuses on ARR. He confirmed the NDR of 111% was expected due to lapping a price increase and is projected to remain stable through fiscal 2025.

Alex Zukin asked a two-part question about voice performance relative to expectations and its future growth contribution, and for the sequential gross margin change when adjusted for FX and A2P fees.

Answer

CEO Khozema Shipchandler stated that voice is performing very well, driven by AI demand, and is gross margin accretive, though its impact is moderated by the large messaging business. CFO Aidan Viggiano clarified that after adjusting for fees and FX, non-GAAP gross margin was roughly flat quarter-over-quarter.

Alex Zukin from Wolfe Research asked how iWant fits into the overall product strategy with Beti, what defines success for iWant, and for an update on retention trends related to Beti and the potential combined impact with iWant.

Answer

CEO Chad Richison explained that both products drive significant retention. He differentiated them by noting iWant is a broad, system-wide interface that touches every module and piece of data, while Beti is more focused on the payroll process. He described iWant as a new, simpler way to access all information, which in turn makes features like Beti 'sweeter' and easier to use, representing a fundamental shift in user interaction.

Alex Zukin from Wolfe Research asked if the disruption in marketing is causing customers to pause or if it's a call to action, and also how HubSpot's monetization strategy adapts if LLMs become the primary user interface.

Answer

CEO Yamini Rangan asserted that marketers are not pausing but are actively looking to HubSpot for a new playbook to grow beyond search, making it a significant opportunity. CTO Dharmesh Shah added that HubSpot is creating value by using agents as lead magnets themselves, with leads flowing directly into a customer's HubSpot account, creating a powerful new flywheel for inbound marketing.

Alex Zukin from Wolfe Research LLC asked if marketing disruption is causing customer hesitation or acting as a call to action, and how monetization evolves if LLMs become the primary user interface.

Answer

CEO Yamini Rangan stated that marketers are not pausing; they are actively looking to HubSpot for new playbooks to navigate the world beyond search, making it a call to action and a major opportunity. CTO Dharmesh Shah added that HubSpot is seeing an unexpected use case where customers create agents on Agent.ai as lead magnets, a new form of inbound content. These leads flow directly into their HubSpot portal, creating a powerful flywheel effect.

Alex Zukin from Wolfe Research LLC questioned the dynamic between very strong bookings and a sequential slowdown in recurring revenue growth. He also asked about the wide Q3 guidance and implied Q4 acceleration, probing if go-live predictability is changing.

Answer

Executive VP & CFO Jeremy Johnson attributed the current revenue growth rate to a prior 'air pocket' from periods without 40% sales growth. He explained that the benefits of the recent bookings strength are now beginning to flow through, leading to the guided acceleration from ~14% constant currency growth in Q2 to a 16-19% range in Q4. He assured that the company has good visibility and confidence in this back-half ramp.

Alex Zukin from Wolfe Research asked about the company's confidence in sustaining the recent improvement in Net Revenue Retention (NRR) and requested more detail on the trajectory of operating margin leverage.

Answer

CFO Graham O'Brien expressed confidence in returning NRR to the 90s, driven by strong upmarket retention, favorable mix shift, and expansion opportunities with Copilot and Go-to-Market Studio. He reiterated that margin improvement is expected to materialize over time as a 'step function' rather than being linear, viewing it as a timing progression, not a conflict with growth.

Alex Zukin from Wolfe Research asked about the company's confidence in sustaining the recent improvement in Net Revenue Retention (NRR) and requested more detail on the trajectory of operating margin leverage.

Answer

CFO Graham O'Brien expressed confidence in returning NRR to the 90s, driven by improving upmarket retention, a favorable business mix shift, and expansion opportunities with Copilot and Go-to-Market Studio. He reiterated that margin improvement is a matter of timing and will occur in step functions rather than being linear.

Alex Zukin of Wolfe Research LLC asked about the level of conservatism in the outlook regarding macro impacts and questioned why the free cash flow margin was raised by 100 bps when the tax bill provided a 200 bps benefit.

Answer

President & CEO Lynn Moore stated there is not significant conservatism in the 2025 outlook related to macro factors. EVP & CFO Brian Miller explained the free cash flow guidance also reflects the positive impact of higher earnings, particularly from strong-performing transaction revenues. He advised against assuming a simple doubling of the tax benefit for next year's modeling.

Alex Zukin followed up on AI, asking when it might become a significant growth catalyst to inflect the business trajectory. He also asked about Q2 billings performance, specifically regarding any pull-ins, and the confidence in the second-half guide.

Answer

CEO Dennis Woodside positioned AI as one of several key growth levers, alongside ESM, Device 42, and market share gains. COO & CFO Tyler Sloat addressed billings, noting a minor, non-significant pull-in and stated that the strong H2 guide reflects confidence from a solid Q2 performance and healthy pipeline.

Alex Zukin sought to understand the primary drivers of the strong license revenue outperformance in the quarter. He also asked if the Net Retention Rate is expected to trend down further before troughing and about any potential for further go-to-market efficiencies.

Answer

CFO & COO Ashim Gupta attributed the license revenue performance to a favorable mix of deals in terms of duration and deployment method, stating there was nothing unusual to report. On NRR, he reiterated that the trend is embedded in the guidance and the company is bullish on agentic activity but expects no material impact this year. He confirmed the go-to-market restructuring is complete but the company will continue to seek efficiencies.

An analyst on behalf of Alex Zukin from Wolfe Research asked for more calibration on the current buying environment and the degree of conservatism embedded in the 2025 guidance.

Answer

Co-Founder and CEO Tom Shea described the Q4 environment not as one of abrupt deal halts, but of a 'lack of urgency' from large multinational and government customers, noting that CFOs are sensitive buyers who react early to uncertainty. He characterized the guidance as prudent in light of factors outside their control, while reaffirming confidence in the company's product strategy and ability to execute.

On behalf of Alex Zukin, Patrick inquired about trends in customer budgets for data initiatives throughout the year and the outlook for spending in Q4 and into the next year.

Answer

CEO Amit Walia explained that customer spending has shifted from purely defensive, cost-saving projects to include offensive, transformational initiatives. He emphasized that GenAI is embedded in every conversation, driving pilots and new use cases. Walia identified data, AI, and cybersecurity as the primary areas where customers are consistently allocating their budgets.

Patrick from Wolfe Research asked for clarification on the dynamics of self-managed subscription renewals, where rates are high but duration is decreasing, and inquired about plans to further accelerate the on-premise to cloud migration story.

Answer

CFO Mike McLaughlin explained that shorter renewal terms are specific to self-managed on-prem subscriptions, not maintenance. This impacts upfront GAAP revenue recognition under ASC 606 but does not affect ARR or cash flow. He views this trend as a positive signal that customers are preparing to migrate, and expects migration growth to outpace overall cloud subscription ARR growth.

Speaking on behalf of Alex Zukin, Rich Magnus asked about the evolution of the competitive landscape over the past year and requested color on billings trends for the next two quarters.

Answer

CEO Dustin Moskovitz stated that the competitive landscape has not seen significant changes, noting that customers are often hesitating on large consolidation deals. COO Anne Raimondi expressed confidence in future billings, citing improved revenue operations, better sales rep enablement, and strong performance in international regions like EMEA and Japan, which act as leading indicators.

Asked about booking linearity, the source of SMB headwinds (churn vs. expansion), and modeling net new ARR. Also inquired about the target for converting free users to paid and the expected impact on NRR.

Answer

Bookings started slow but finished strong. SMB trends were consistent with the past, while enterprise was strong. Net new ARR growth is expected to improve through the year. The new model simplifies licensing (internal contributors are paid), which is expected to significantly increase the paid user base and potentially drive premium capability sales.

Asked about changes in the demand environment, the impact of generative AI on spending priorities, and the financial impact of the recent BSL license change.

Answer

The demand environment is consistent and has not materially changed. Generative AI is seen as a tailwind as it drives multi-cloud adoption, which benefits HashiCorp's portfolio. No revenue impact is expected from the BSL license change, as its purpose is to enable long-term investment in open innovation.