Bradley Sills

Bradley Sills of Bank of America Merrill Lynch noted the 20% sequential ramp in professional services revenue and asked about the underlying drivers and whether it serves as a leading indicator for future business.

Answer

CFO Mike Scarpelli clarified that the quarterly increase was not indicative of a broader trend. The spike was due to hitting specific milestones and recognizing deferred revenue for a single large customer. He reiterated that Snowflake's strategy is for partners and GSIs to handle the vast majority of services, with Snowflake's team acting as expert services, and that underlying growth was normal.

Bradley Sills of Bank of America asked for an update on the go-to-market collaboration with hyperscaler partners like AWS and inquired about the expected consumption ramp from new products like Snowpark and Cortex heading into next year.

Answer

CEO Sridhar Ramaswamy described excellent relationships with AWS and Azure and noted early progress with GCP, with EVP of Product Christian Kleinerman adding that Apache Iceberg is a key area of collaboration. CFO Mike Scarpelli stated that while he would not guide for next year, new products are becoming meaningful revenue contributors. He confirmed Snowpark is on track for 3% of revenue and that Dynamic Tables is gaining traction, promising more color on the Q4 call.

Bradley Sills asked for more color on the company's R&D investments, specifically whether they are focused on newer offerings like vector search and streaming or on addressing new workloads. He also inquired to what extent the focus on higher-quality workloads contributed to recent success.

Answer

President & CEO Dev Ittycheria confirmed that R&D is a key investment area, leading to performance improvements like the recent 8.0 release, but deferred a detailed discussion to the upcoming Investor Day. He strongly affirmed that the strategic focus on acquiring higher-quality enterprise workloads, which grow faster and for longer, was a major contributor to the quarter's strong growth.

Bradley Sills asked for clarification on why fiscal year 2026 is being called a 'transition year' when consumption patterns are stabilizing. He also inquired about which categories are showing particular strength in new workload acquisition.

Answer

CFO Serge Tanjga clarified that it's a 'transition year' because major growth initiatives like application modernization and winning the AI stack are only expected to be incrementally beneficial to revenue in FY26, with more meaningful contributions in future years. CEO Dev Ittycheria added that new workload strength is being seen 'everywhere,' across both the high and low ends of the market.

Bradley Sills asked for an update on the adoption ramp of new products like Vector Search and Stream Processing and inquired about the focus of Cedric Pech in his newly expanded role.

Answer

CEO Dev Ittycheria reported high demand and uptake for new products, citing strong reception for Atlas Search Nodes, high uptake for Vector Search, and significant interest in Stream Processing. He explained that Cedric Pech's promotion from CRO is an expansion of his role, designed to better align the organization to capture upmarket, app modernization, and AI opportunities.

Bradley Sills asked how newer services like vector search and stream processing are contributing to new workload strength. He also inquired if the consumption improvement in Q2 was broad-based like the Q1 slowdown, potentially signaling a macro recovery.

Answer

CEO Dev Ittycheria highlighted solid momentum in Search with its new 'Search Nodes' feature, growing adoption of Vector Search, and strong early interest in the recently launched Stream Processing. CFO Michael Gordon confirmed the Q2 consumption improvement was broad-based but cautioned it was within a normal range and not a clear sign of macro improvement.

Bradley Sills of Bank of America Merrill Lynch asked about the traction of the AI-powered invoice reminder feature and whether its performance could be a leading indicator for future AI agents.

Answer

CEO Sasan Goodarzi confirmed that the invoice reminder is a tangible and successful example of AI's impact. He shared that customers using the feature see 10% higher payments volume and get paid five days earlier. He positioned this as just a small part of the broader Payments AI agent's capability, which will expand to automate bill payments, offer lines of credit, and create payment-enabled estimates, indicating strong potential for future AI-driven services.

Bradley Sills asked about the progress of advertising efforts targeting the full-service tax filer segment and for any leading indicators of success.

Answer

CEO Sasan Goodarzi reiterated that the end-to-end strategy, from marketing campaigns to the product experience, is building a strong customer funnel. He emphasized the campaign's focus on a superior virtual experience, immediate money access, and disruptive pricing. He highlighted a key shift in the full-service experience from a "software" to a "services" model, where experts now engage customers within minutes and complete returns rapidly, driving end-to-end strength in the assisted category.

Bradley Sills asked about the key learnings from building out the GenOS AI platform and the strategic progression toward potentially offering standalone AI-driven SKUs.

Answer

CEO Sasan Goodarzi outlined a multi-step progression. The current focus is using AI to drive new customer growth and adoption of existing services like payments and live experts. In the future, as the AI agent's capabilities expand, Intuit may test standalone SKUs where the AI does everything for the customer. He stressed that the key learning and competitive advantage is the difficulty of combining Intuit's vast, proprietary financial data with its GenAI platform (GenOS) to deliver accurate and cost-effective experiences, which is hard for others to replicate.

Bradley Sills asked about the level of customer engagement with the Workday Illuminate and agentic platform, and for an update on the commercial (medium enterprise) business.

Answer

CEO & Director Carl Eschenbach reported strong engagement, citing over 100% quarter-over-quarter growth for the Eversort-powered contract intelligence product and over 100% year-over-year growth for Extend Pro. He also noted a very good quarter for the medium enterprise segment, driven by full suite demand and positive reception to the 'Workday Go' launch, with a new executive hired to accelerate growth in the segment.

Bradley Sills from Bank of America inquired about the potential of the 'Workday Go' initiative to unlock the medium enterprise market and whether there were different macro outlooks for the office of the CFO versus HR.

Answer

CEO Carl Eschenbach explained that Workday Go is a focused campaign for the medium and emerging enterprise market, featuring better pricing, packaging, and faster deployments (as little as 60 days) through partners. He stated this initiative is gaining early momentum. Regarding the macro outlook, Eschenbach noted no significant difference in tone or buying behavior between the CFO and HR buying centers, describing the current environment as 'the new norm.'

Bradley Sills of Bank of America Corporation asked about the potential of the 'Workday Go' initiative to unlock the medium enterprise market and whether there were any differences in outlook between the office of the CFO versus HR.

Answer

CEO Carl Eschenbach detailed that 'Workday Go' is a focused campaign for the medium and emerging enterprise market, featuring better pricing, packaging, and faster deployments (as little as 60 days) via partners. He stated there was no discernible difference in the buying environment or tone between the CFO and HR buying centers, describing the current macro as the 'new norm'.

Bradley Sills from Bank of America asked for details on Workday's international performance, particularly the source of strength in Europe and the go-to-market progress in the region.

Answer

CEO Carl Eschenbach acknowledged the large international opportunity and noted that while EMEA was a headwind for most of the year, the U.K. and Germany delivered their strongest quarter of the year in Q4. He highlighted major wins with Bayer and Henkel but cautioned one quarter is not a trend. CFO Zane Rowe added that the FY26 forecast does not assume a meaningful improvement in the European macro environment.

Bradley Sills of Bank of America inquired about the sources of strength in the government and higher education verticals and asked which other industries showed potential for similar momentum.

Answer

CEO Carl Eschenbach highlighted that 90% of wins in these verticals were for the full suite, as these customers tend to make platform-wide decisions. He cited the Workday Student product as a key differentiator in higher ed. He also pointed to Healthcare as another strong vertical, evidenced by a major win at Common Spirit Health that leveraged HCM, Financials, and supply chain products.

Bradley Sills requested more detail on the review of Workday's growth initiatives, asking which areas management felt more bullish about that now support the mid-teens growth outlook.

Answer

CEO Carl Eschenbach confirmed that after a review, the company remains confident in its key growth initiatives, including financials, international expansion, and the partner community, and would not pull back on any. He stated these investments are already paying dividends. CFO Zane Rowe added that the outlook does not factor in any significant M&A.

Bradley Sills asked about the business mix across hyperscalers, AI labs, and enterprises, and inquired about the key factors driving down CoreWeave's cost of debt from the perspective of creditors.

Answer

CEO Michael Intrator noted broad-based demand with 'green shoots' in finance, media, and healthcare, but confirmed large AI labs still dominate in scale. He highlighted that the Weights & Biases acquisition brought in 1,600 new enterprise clients. On debt costs, he credited the team's ability to make the infrastructure assets understandable and underwritable for debt markets, calling the recent 900 basis point reduction in borrowing cost a 'seismic level shift.'

Bradley Sills from Bank of America Merrill Lynch asked about the business mix across hyperscalers, AI labs, and enterprises, and also inquired about the key factors driving down CoreWeave's cost of debt.

Answer

CEO Michael Intrator described broad-based demand, with large labs dominating in scale but significant 'green shoots' in finance, media, and healthcare, boosted by the Weights & Biases acquisition. He attributed the dramatically lower cost of debt to the team's proven ability to deliver high-quality, underwritable infrastructure, which has successfully attracted the largest pools of capital from the debt markets.

Bradley Sills inquired about the primary catalysts for large expansion deals, asking if they are driven by demand for next-generation GPUs, the expansion of existing models, or the introduction of new models, and about the visibility into these deals.

Answer

CEO Michael Intrator described a 'layering' process where satisfied clients repeatedly expand their footprint. He highlighted a key trend where customers purchase new state-of-the-art infrastructure for training and repurpose their older, still-contracted infrastructure for other use cases like Inference. This cycle provides a strong foundation for the company's business and financing model.

Bradley Sills from Bank of America Merrill Lynch requested engagement data on customers using HubSpot's AI agents, asking about the frequency of use and interaction levels for early adopters.

Answer

CEO Yamini Rangan reported strong momentum, with 4,000 customers on Customer Agent and consistent resolution rates over 50%, with some reaching 70-80%. She noted a 6x increase in resolutions since January, surpassing one million ticket deflections. Rangan emphasized that agents are delivering tangible work, such as deflecting support tickets and setting up meetings, which is driving adoption and excitement.

Bradley Sills from Bank of America Merrill Lynch asked for data illustrating customer engagement with HubSpot's AI agents, such as usage frequency and interaction patterns.

Answer

CEO Yamini Rangan highlighted strong momentum, with 4,000 customers using Customer Agent and achieving resolution rates consistently above 50%, with over 1 million ticket deflections. She noted that agents are delivering tangible work, such as deflecting support tickets, setting up meetings, and writing content. Rangan expressed excitement about the early traction and the shift from providing productivity software to delivering automated work for customers.

Bradley Sills asked how "plug-and-play" HubSpot's AI agents are, inquiring about the level of data preparation required by customers and how the deployment effort compares to other HubSpot features.

Answer

CEO Yamini Rangan emphasized that HubSpot's core competency is making complex technology easy to use for SMBs. She explained that while agents require data and context, the HubSpot platform is designed to provide this foundation. For customers with well-structured data, such as a documented knowledge base or support ticket history, deploying Customer Agent can take as little as 15 to 30 minutes. The platform-centric approach is designed to handle the complexity, making the experience seamless and consistent with HubSpot's brand promise.

Bradley Sills asked for an update on the upselling motion during the quarter, questioning if there was any improvement in net upgrades beyond the previously noted stabilization in downgrades and churn, especially within the value-oriented SMB environment.

Answer

CFO Kathryn Bueker clarified that the 2-point sequential increase in net revenue retention to 104% was primarily driven by seat upgrades associated with the new pricing model. She stated that while downgrades have stabilized, the broader net upgrade motion remains a headwind due to persistent value-driven purchasing behavior, which would require a significant change in the macro environment to improve.

Bradley Sills asked about the drivers behind the strength in multi-hub wins, questioning whether it's primarily from new customers landing with multiple hubs or from cross-sell activity, and why this momentum is accelerating now.

Answer

CEO Yamini Rangan attributed the momentum to 'all of the above,' stating that multi-hub adoption is strong with both new customers and the installed base. She cited two key drivers: customers consolidating their tech stacks on HubSpot's platform and the accelerating pace of product innovation, particularly in Content Hub and Service Hub, which makes HubSpot the clear choice for consolidation.

Bradley Sills from Bank of America Merrill Lynch asked about the drivers behind the success with upmarket enterprise customers, specifically regarding go-to-market changes and the role of system integrators.

Answer

President Harley Finkelstein attributed the success to multiple factors rather than one change. He cited the superior product, high value-to-cost ratio, and the platform's ability to future-proof large retailers. He also highlighted Commerce Components, like Shop Pay, as a key on-ramp for initiating conversations with large brands, which is complemented by a strong partner ecosystem and the network effect of signing major logos.

Bradley Sills asked for more detail on Shopify's international expansion, inquiring about the specific regions of focus and the nature of the investments being made, such as direct marketing or local experts.

Answer

President Harley Finkelstein highlighted international as a key growth driver, with EMEA GMV growing 37% in Q4, led by the U.K., Germany, and France. He noted investments are product-led, including localized sign-ups, compliance, local payment methods like Klarna, and POS availability. CFO Jeff Hoffmeister added that same-store sales growth in Europe continues to outpace the broader e-commerce market in those countries.

Bradley Sills inquired about the underlying drivers for the upside in eligible lives and member yield, and asked for more details on the efficiency gains from AI, particularly in developer productivity.

Answer

President Jim Pursley attributed the growth in eligible lives to the strength of the product, new offerings, and the flexible pricing model. Co-Founder & CEO Daniel Perez explained that yield improvements stemmed from a portfolio of proprietary data analytics and consumer-grade growth techniques. On AI, CFO James Budge noted R&D costs are down to 16% of revenue. Daniel Perez added that AI is being applied across the entire company, significantly boosting R&D productivity and improving care team efficiency, which has lowered response times by 47% year-over-year while member NPS hit an all-time high.

Bradley Sills of Bank of America Merrill Lynch questioned whether the current AI and agentic cycle could materially shift ServiceNow's business mix across its technology, CRM, and creator workflow segments.

Answer

President, CPO & COO Amit Zavery explained that AI, through ProPlus SKUs, encourages the use of multiple workflows together. He anticipates the emergence of new, packaged industry workflows built on the Creator platform and new opportunities in areas like security and risk governance, suggesting the business mix will likely evolve.

Bradley Sills of Bank of America Corporation asked about the deployment cycle for AI agents, including the effort required and whether the process becomes a scalable 'rinse and repeat' model.

Answer

President, CPO and COO Amit Zavery explained that an out-of-the-box AI agent can be running in a few weeks, while more complex orchestrations connecting multiple systems might take a few months. Chairman and CEO Bill McDermott provided internal success metrics, including a 16x improvement in lead-to-sale conversion and an 86% deflection rate of manual tasks, illustrating the rapid and scalable value being generated by these agents.

Bradley Sills asked about the key drivers behind the strong growth in Customer and Employee Workflows and whether Now Assist is creating a pull-through effect for these applications.

Answer

CEO Bill McDermott described a symbiotic relationship where core workflows and agentic AI mutually drive each other's adoption. He asserted that ServiceNow has the 'best CRM solution' because it uniquely handles selling, fulfilling, and servicing on a single platform. To illustrate the ROI, he shared extensive internal 'Now on Now' metrics, including saving 400,000 labor hours, achieving 80% case deflection, and increasing prospect conversion by up to 16x using its own AI agents.

Bradley Sills observed that R&D headcount growth is significantly outpacing sales and marketing. He asked what this implies about the business and whether product innovation is now a greater gating factor for growth than hiring more sales representatives.

Answer

CFO Gina Mastantuono clarified that while total S&M headcount growth appears slower due to leverage in operational roles, the company is still strongly investing in quota-bearing sales reps. She emphasized that R&D has consistently been a primary investment area, especially with the focus on AI, and that headcount growth is prioritized for both engineering talent and feet-on-the-street sales to drive growth.

Bradley Sills pointed out the notable trend of R&D headcount growth significantly outpacing sales and marketing growth. He asked if this implies that product innovation, particularly in AI and new applications, is now the primary gating factor for growth, more so than hiring additional sales reps.

Answer

CFO Gina Mastantuono clarified that while total S&M headcount growth appears slower, the company is still aggressively hiring quota-bearing reps while gaining operational leverage in other marketing and sales functions. She affirmed that R&D has consistently been a top investment priority to fuel innovation, especially in the age of AI, and that the company will continue to allocate resources to both engineering talent and 'feet on the street' to drive growth.

Bradley Sills from Bank of America Merrill Lynch inquired about the key leading indicators that signal the AgentForce cycle will be a material growth driver for Salesforce.

Answer

Chair and CEO Marc Benioff pointed to the rapid customer adoption (4,000 paid customers in months) and the pull-through effect on other clouds. President and CRO Miguel Milano added that AgentForce deals average four other clouds and that the company is focused on driving consumption, noting 30% of Q1 AgentForce bookings were expansions. President and Chief Engineering Officer Srini Tallapragada mentioned the use of 'forward deployed engineers' to accelerate customer success and product maturity.

Bradley Sills asked for the key leading indicators that provide confidence that the AgentForce adoption cycle will be a material driver for Salesforce, such as Data Cloud deals or pilot programs.

Answer

CEO Marc Benioff pointed to the unprecedented speed of adoption (4,000 paid customers in months) and the fact that AgentForce pulls through other clouds. CRO Miguel Milano added that the focus is now on consumption, with 30% of AgentForce bookings coming from expansions. Chief Engineer Srini Tallapragada described a tight customer feedback loop via 'forward deployed engineers' that is rapidly maturing the product.

Bradley Sills from Bank of America inquired about the current macroeconomic environment's impact on core eSignature activity and asked about the direct sales channel's preparedness for selling the more complex, end-to-end IAM solution.

Answer

CEO Allan Thygesen reported no material changes in trends for envelope volume, noting the company's diversification across sectors and geographies provides resilience. He explained that for the IAM solution sale, the company has freed up sales capacity by moving some accounts to self-serve, enabling smaller portfolios and deeper client engagement. He also highlighted significant investment in sales team upskilling and enablement.

Bradley Sills asked which specific growth initiatives provide the confidence for an improvement in the take rate in the second half of the year, excluding the impact of currency fluctuations.

Answer

CEO René Lacerte highlighted several areas showing 'green shoots' of success. He pointed to initiatives improving supplier engagement with products like virtual card and advanced ACH, the rollout of newer ad valorem products like Pay By Card and invoice financing, and strong progress in attracting larger, mid-market customers, noting a 30% year-over-year increase in average deal size for the Spend & Expense team.

Bradley Sills asked for more detail on the sources of incremental strength in the quarter, particularly from enhanced go-to-market efforts, and requested color on spending trends across different categories.

Answer

Chairman, CEO and Founder René Lacerte attributed the strength to progress across all three corporate priorities: enhancing the platform, expanding payments, and deepening the ecosystem (e.g., the Xero beta launch). President and CFO John Rettig noted seeing 'green shoots' in spend volume, especially from larger businesses. He highlighted that categories like real estate and facility spend, which are leading indicators, are now expanding after four straight quarters of contraction.

Bradley Sills from Bank of America asked for more color on the sources of strength for Copilot, inquiring about adoption patterns like departmental deals and the common use cases driving increased usage.

Answer

CEO Satya Nadella described an adoption pattern that often starts in specific departments like sales or finance, where productivity gains are immediate. He explained that usage then spreads organically across the enterprise due to collaboration network effects, as employees 'think with AI and work with people.' He noted that the new Copilot Chat offering provides more flexibility for enterprises to deploy it ubiquitously.

Bradley Sills asked about the general demand environment, looking for signs of positive inflections in big pharma spending. He also requested an update on the Vault CRM replatforming effort and Veeva's comfort level with large accounts.

Answer

CEO Peter Gassner characterized the environment as 'stabilized' and 'a bit better' than a year ago, expressing encouragement from high-level customer discussions. He conveyed strong confidence in the Vault CRM replatforming, stating the product is at full functionality with live customers and that the team's progress over the past two years has been 'ecstatic'.

Asked about the strategic emphasis on security as a landing point for new customers and for more detail on the tactical process improvements being made to improve pipeline velocity.

Answer

Vault has always been a primary landing product alongside Terraform. The change is an evolution in the go-to-market narrative from a point product (secrets management) to a broader 'security lifecycle' solution. The process improvements are about driving operational consistency and discipline across the global sales team, which is a standard part of scaling an organization of this size, leveraging the new president's experience.

Asked for details on recent cloud platform updates and their potential as a catalyst, and inquired about the relative macro impact on Terraform versus Vault.

Answer

Recent cloud updates (Boundary Enterprise, Vault Cloud Secrets, Terraform Cloud features) are aimed at differentiating the cloud offering and are generating enterprise interest. The company is not seeing a significant difference in macro impact between its core products like Terraform and Vault, as both address strong, ongoing customer needs for multi-cloud and security.