Clark Wright

Clark Wright asked for details on the assumptions underpinning the fiscal 2027 top-line outlook, particularly the mix between AHSC count growth and total revenue per AHSC, and whether AccessOne's contribution is included in these figures.

Answer

Balaji Gandhi (CFO, Phreesia) confirmed that AccessOne is included in the fiscal 2027 outlook. He specified that AccessOne is expected to contribute approximately 1 point to the mid-single-digit AHSC growth rate for fiscal 2027, with about 65 of its annualized 80 AHSCs falling into that fiscal year.

Clark Wright asked for an understanding of the assumptions behind the fiscal 2027 top-line outlook, the mix between AHSC growth and total revenue per AHSC, and if these figures include AccessOne.

Answer

CFO Balaji Gandhi confirmed that the figures include AccessOne. He explained that AccessOne is expected to contribute approximately 65 AHSCs to fiscal 2027, accounting for about one point of the mid-single-digit AHSC growth, and that total revenue per AHSC is expected to grow double-digits.

Clark Wright asked about the notable sequential increase in GMV this quarter compared to historical Q3 trends, inquiring about key drivers and whether money transfer and payments growth reduces typical seasonality. He also questioned how Riskified continues to invest while maintaining relatively flat operating expenses and managing margin expansion.

Answer

CFO Aglika Dotcheva explained that GMV is an output of revenue inputs, and the second half of the year is more aligned with historical trends, expressing excitement about GMV returning to near double-digit growth. On expenses, she highlighted a focus on staying within the annual guide, with Q3 being relatively low and Q4 expected to be higher, emphasizing investments in gross-generating areas and optimizing operational parts, including offshoring activities. CEO Eido Gal added that development capacity increased by almost 50% by leveraging better cost locations and reducing 'keep the lights on' work.

Clark Wright inquired about the notable sequential increase in GMV this quarter compared to historical Q3 trends, asking about the key drivers and if money transfer and payments growth reduces typical seasonality. He also questioned how Riskified continues to invest while maintaining relatively flat operating expenses and managing to its margin expansion story.

Answer

Aglika Dotcheva, CFO, explained that GMV is an output of revenue inputs, and the Q3 GMV growth is more aligned with historical trends for the second half, expressing excitement about it returning close to double digits. Regarding expenses, Aglika Dotcheva noted that Riskified focuses on investing in gross-generating areas and optimizing operational parts, citing offshoring activities. Eido Gal, Co-founder and CEO, added that development capacity increased by almost 50% by leveraging better cost locations and reducing 'keep the lights on' work, emphasizing a 'constraint breeds creativity' approach.

Clark Wright asked about Riskified's progress in expanding its role within the payments and remittance space. He also inquired how the company is positioned to help merchants handle a potential 'AI fraud crisis.'

Answer

CEO Idogal explained that success in the payments and remittance space follows their proven strategy: developing custom models and features for a vertical, which builds expertise and brand recognition, thereby attracting more merchants in that space. Regarding an 'AI fraud crisis,' he noted that increasing fraud complexity is a net positive for Riskified, as it makes internal solutions more challenging for merchants and drives demand for a comprehensive platform.

Clark Wright asked about the limitations of homegrown fraud solutions versus Riskified's value proposition, especially with AI empowering bad actors. He also inquired about the assumed mix of growth for 2025 between new logos and existing customer expansion.

Answer

CEO Eido Gal provided a concrete example of how Riskified's network effect and advanced capabilities identified and stopped a sophisticated Gen AI-driven fraud attack across multiple merchants, a feat difficult for any single in-house team. CFO Aglika Dotcheva stated that the 2025 growth mix is similar to initial expectations, with new logo revenue potentially slightly higher and same-store sales slightly lower, resulting in a net dollar retention rate expected to be 'above, but close to 100.'

Clark Wright asked about the contributions from the agency business, specifically the 23 brands added, and the growth of independent agencies relative to direct enterprise relationships.

Answer

Chris Greiner (CFO, Zeta Global) noted that direct mix was up over 30% on a year-over-year revenue growth basis, and agency direct mix increased from 52% to almost 60%. David Steinberg (Co-Founder, Chairman, and CEO, Zeta Global) reiterated that direct to enterprise remains the vast majority of the business but expressed satisfaction with the expansion with agency clients, including a dedicated sales force for independent agencies.

Clark Wright inquired about the contributions from the agency business, specifically the growth of independent agencies, relative to direct enterprise relationships, looking ahead to 2026.

Answer

CFO Chris Greiner stated that the direct mix was up over 30% on a year-over-year revenue growth basis, and agency direct mix increased from 52% to almost 60% this quarter. CEO David Steinberg emphasized that direct to enterprise remains the vast majority of the business but expressed satisfaction with the expansion through agency clients, noting a dedicated sales force for independent agencies.

Clark Wright asked for the expected size of the agency segment as a percentage of total business by year-end and what ARPU growth would have been this quarter excluding the agency business.

Answer

CFO Chris Greiner declined to provide specific guidance on the agency mix or a hypothetical ARPU, but did note the agency business effectively doubled from 2023 to 2024. CEO David Steinberg emphasized that the core enterprise business is also growing nicely and that the agency segment is expected to remain a minority of the total business for many years.

Clark Wright of D.A. Davidson asked about the potential opportunity for Zeta if the walled garden ecosystem becomes more fragmented. He also inquired about the changing duration of customer contracts, particularly the multiyear deals mentioned.

Answer

CEO David Steinberg stated that a breakup of the large walled gardens would present a 'massive opportunity' for Zeta to partner with or acquire new assets, though he cautioned it's not an imminent event. Regarding contract duration, he noted a significant shift from month-to-month agreements with early agency partners to multiyear deals with the three largest, providing much greater long-term visibility.

Clark Wright from D.A. Davidson inquired how the LiveIntent acquisition will impact KPIs like scaled customer count and whether the significant ARPU uplift from scaled to super-scaled customers could apply to LiveIntent's client base.

Answer

CFO Christopher Greiner explained that LiveIntent's metrics will be incorporated in the Q4 results and will add a substantial number of scaled customers. However, he noted LiveIntent's ARPU for its largest customers is closer to $1.5 million, compared to Zeta's nearly $5 million, suggesting a different starting point for ARPU expansion.

Clark Wright of D.A. Davidson inquired about how the LiveIntent acquisition will impact key metrics like scaled customer count, and whether the typical 17x ARPU uplift from scaled to super-scaled customers could apply to LiveIntent's client base.

Answer

CFO Christopher Greiner explained that LiveIntent will add a substantial number of scaled customers, but their ARPU is generally lower than Zeta's, particularly at the super-scale level. Full metric integration will be provided in the next quarterly report. CEO David Steinberg clarified that no LiveIntent metrics were included in the Q3 results as the deal closed in Q4.

Clark Wright inquired about the concentration of churn headwinds (mid-market, downselling vs. logo churn) and the rationale behind not re-upping the stock buyback authorization, considering other capital allocation strategies.

Answer

Rory Read, President and CEO, clarified that churn is mainly downsell, concentrated at the lower end/mid-market, and reiterated focus on enterprise. He explained that the company is prioritizing tuck-in M&A for growth in CCaaS, AI, and social, while the board continuously assesses buybacks.

Clarke Wright of D.A. Davidson requested commentary on the net addition of seven $1 million-plus customers, asking about the impact of churn and the contribution from CCaaS adoption. He also inquired how enterprise-specific bookings trended against expectations.

Answer

Chief Financial Officer Manish Sarin clarified that the $1M+ customer metric is based on trailing 12-month revenue, so growth reflects prior-quarter sales and upsells across the full platform, not just new logos from the current quarter. Co-CEO Trac Pham added that, overall, the company continues to perform well in its sweet spot, which is the large enterprise segment.

Clark Wright, on behalf of Gil Luria, inquired about PDF Solutions' China exposure, the potential impact of market disruptions, and the company's strategy to manage associated risks and opportunities.

Answer

CEO John Kibarian stated that China is an important, long-term market where the company has operated since 2006. He explained that PDFS began bifurcating its China operations in 2017, a process accelerated by the pandemic, and now runs them autonomously. Kibarian noted that a significant portion of China revenue comes from royalties and gain share from past deployments, which insulates the company from short-term shocks. He believes PDFS is well-positioned to serve the Chinese market, particularly on trailing-edge nodes, while effectively separating its Western and Chinese operations.

Clark Wright asked for a breakdown of the improvement in retention metrics, seeking to understand the relative impact of reduced churn versus momentum in upselling. He also requested a progress report on sales enablement initiatives.

Answer

CFO Andrew Casey attributed the Net Retention Rate (NRR) improvement primarily to strong platform cross-sells, where customers see compounding value from using multiple products. He noted that the team has also made great strides in improving gross retention by working through challenging volumetric contracts. On sales enablement, Casey described it as a mentality change towards enterprise selling, involving refined funnel dynamics, better investment in coverage, and increased rigor in inspecting opportunities.

Clark Wright asked for clarification on the 'budget scrutiny' comments, specifically where the funds for cross-sell opportunities are being sourced from. He also inquired if recent NRR expansion was driven by data volumes, as mentioned at the Investor Day, and if the outlook assumes any uplift from that.

Answer

CFO Andrew Casey explained that budget scrutiny is overcome by demonstrating a clear ROI, which involves helping customers reduce expenses on other point solutions and showing how Amplitude can drive revenue and efficiency. Regarding NRR, Casey clarified that the focus is shifting from data volume expansion to selling more platform capabilities. He noted Q1 was balanced between new logos and expansions, and future NRR progression will be driven by large enterprise expansions and continued churn reduction.

Clark Wright questioned how the role of product analytics is changing with the integration of AI into user experiences, particularly regarding the "pop-up party" issue. He also asked about the expected delta between ARR and revenue growth in 2025.

Answer

CEO Spenser Skates stated that AI can make analytics more valuable by automatically surfacing insights, moving beyond manual queries. He compared the current overuse of pop-ups to the late '90s web and explained Amplitude's advantage is using analytics data to deliver tailored, timely guides that see 2x-10x higher engagement. CFO Andrew Casey noted that factors like increased contract duration and enterprise focus influence the relationship between ARR and revenue.

Clark Wright asked about the drivers behind the significant acceleration in long-term RPO and whether the Q4 guidance assumes any benefit from IT budget flushes.

Answer

CFO Andrew Casey attributed the strong long-term RPO growth directly to the company's focus on building deeper enterprise relationships and securing multi-year, full-platform contracts, which increases revenue predictability. He also clarified that the Q4 guidance does not include any assumptions for potential year-end IT budget flushes.

Clark Wright from D.A. Davidson asked about the impact of new pricing on deal friction and LiveRamp's competitive positioning in the AI landscape.

Answer

CEO Scott Howe described the new pricing model as a 'game changer' that reduces friction for new customers, citing a major QSR win as a direct result of the flexible, usage-based entry point. Regarding AI, Howe clarified that LiveRamp is not an AI company but a critical 'AI enabler.' He stated LiveRamp's right to win is its ability to provide the secure, interoperable data connectivity infrastructure that companies need to fuel various AI models with their valuable proprietary data, solving for complexity and security.

Clark Wright of D.A. Davidson inquired about Midland's near-term expectations for Net Interest Margin (NIM) expansion through year-end, the potential peak NIM in the current rate cycle, and the deposit beta assumptions underlying these forecasts.

Answer

CFO Eric Lemke responded that their model projects a 4% to 4.5% NIM improvement in an up 100 basis point environment, which should translate to an additional 5 to 10 basis points of NIM expansion in the second half of the year. He noted that predicting a peak NIM is difficult but expects continued expansion. The model uses a 30% to 35% deposit beta, which has proven conservative so far, though he anticipates betas will rise in Q3 and Q4.