Derrick Wood

Derrick Wood asked for context on the infrastructure build-out required to service Oracle's over $300 billion in new Remaining Performance Obligations (RPO), specifically concerning CapEx and operational cost structure, the ramp of these costs relative to revenue, and the expected Return on Investment (ROI) for this significant spend.

Answer

Safra Catz (CEO) clarified that Oracle focuses on engineering and owning specialized equipment optimized for the Oracle Cloud, rather than property or buildings, which allows for faster and more cost-efficient operations. She explained that equipment is deployed precisely when needed, quickly generating revenue upon customer acceptance. She projected fiscal year 2026 CapEx to be around $35 billion, emphasizing that these investments are made just before revenue generation, providing clear visibility. She also noted Oracle's embedded presence in competitors' clouds, where they are only responsible for their equipment. Larry Ellison (Chairman and CTO) added that a large data hall was accepted by a customer in just one week, demonstrating efficiency, and highlighted Oracle's ability to secure favorable financing terms for networking equipment and GPUs due to its large consumption.

Derrick Wood of TD Cowen asked for an update on Oracle's ability to manage supply availability and efficiently build out data center infrastructure to convert its massive RPO backlog into recognized revenue.

Answer

CEO Safra Catz acknowledged that demand continues to outstrip supply but confirmed Oracle is rapidly expanding capacity, aided by automation and a strategy of securing larger land parcels for data centers. Chairman and CTO Larry Ellison emphasized that their ability to manage thousands of data centers stems from their identical, fully automated design. He also noted that Oracle has hired senior experts from the utilities industry to manage the complex power and construction requirements of these large-scale projects.

Derrick Wood asked about the performance of asset tags versus expectations since its release over a year ago, and whether it's a long-tail growth dynamic or a significant contributor to larger deals and overall growth in the next 12-18 months. He also asked if asset tags were the biggest component of the 8% net new ACV from new products, and if there was a clear number two.

Answer

Dominic Phillips (CFO) expressed satisfaction with asset tags, noting it addresses a large problem (asset loss/theft) with new technology, leading to significant deals like Bonnie Plants. Sanjit Biswas (CEO) added it's an education process for customers. Dominic clarified that the 8% net new ACV from new products was spread across asset tags, commercial navigation, workflows, and maintenance, with no single dominant component.

Derrick Wood of TD Cowen asked if the current market uncertainty creates a better opportunity to gain share from legacy vendors. He also inquired if there were any changes to the company's hiring plans for the year.

Answer

Chief Financial Officer Dominic Phillips stated that the competitive dynamic is not significantly different in the current environment, as Samsara's platform offers a strong value proposition regardless of macro stability, though uncertainty can create deal timing risks. He also confirmed there are no changes to hiring plans, which were already set to be more balanced this year after several years of catch-up hiring.

Derrick Wood asked if Braze is observing customers shifting marketing spend towards first-party data and customer engagement solutions due to AI disruption in search and SEO, and how Braze is capitalizing on this market reaction.

Answer

Co-founder and CEO Bill Magnuson acknowledged that while it's early days for understanding the full impact of AI on demand aggregators, the importance of strong first-party connections, informed by first-party data, and loyalty programs is increasing. He noted that this trend is similar to what has been observed in verticals like travel and hospitality, which are already strong for Braze, reinforcing the value of investing in customer engagement.

Derrick Wood asked for an update on demand and growth levers in the APAC region and questioned what drove the strong Q1 growth in professional services revenue.

Answer

CEO Bill Magnuson acknowledged APAC saw less strength than other regions in Q1 but highlighted growth in Australia/New Zealand and reaffirmed long-term investment plans. CFO Isabelle Winkels explained that the professional services revenue spike was a direct result of a high proportion of net new business signed in Q4, which generates subsequent implementation and onboarding fees.

Derrick Wood asked for an explanation of the puts and takes on margins and investment focus in Q3, comparing it to the significant operating income upside seen in the previous quarter.

Answer

CFO Isabelle Winkles explained that Q3 operating income was impacted by approximately $5 million in costs for customer events like Forge, causing a sequential dip. She noted that while premium messaging is a headwind to gross margin, it is offset by ongoing platform efficiency gains. Variances also result from disciplined hiring practices that can lag budget.

Derrick Wood asked for commentary on the relative strength across different industry verticals and for a comparison of demand trends between domestic and international markets.

Answer

CEO Bill Magnuson noted that international growth is partly driven by expansionary investments into new geos. He observed pockets of strength in consumables, CPG, financial services, and travel & hospitality, attributing this more to Braze's go-to-market prioritization than to the relative health of the verticals themselves. He emphasized a continued focus on a diversified customer base while balancing investment in new frontiers and existing strengths.

Derrick Wood of TD Cowen inquired about the tangible results from the Snowflake partnership on Q2 deals versus future pipeline, and the mechanics of the consumption model's impact on growth, including the 108% NRR figure.

Answer

CEO Josh James stated that partner-sourced deals will materially impact Q3, with leads expected to close at a much higher rate. CFO Tod Crane clarified the 108% NRR applies to new customers who started on consumption and expects gross retention to improve in Q4. Josh James added that even migrated customers show better NRR than seat-based ones.

Derrick Wood asked about partner leverage, questioning if the current level of over 20% of net new ACV from partners is a steady state and if there is a tipping point for it to accelerate revenue growth.

Answer

CEO & Director Carl Eschenbach emphasized that the partner ecosystem's impact extends beyond sourcing deals to driving innovation on the Workday platform, citing the growing Marketplace and strategic partnerships like DailyPay. He expressed excitement about building a "world-class ecosystem" that will drive a "massive economy" around the platform, suggesting continued focus and growth in this area.

Derrick Wood of TD Cowen inquired about the outlook for the U.S. federal business and asked for confirmation that the previously announced restructuring is complete.

Answer

CEO Carl Eschenbach expressed pleasure with the depth of conversations across federal agencies (civilian, DoD, intelligence). He noted a huge opportunity to modernize antiquated systems and that the government is willing to invest to drive efficiencies. CFO Zane Rowe confirmed that the restructuring is 'primarily complete' and that no additional charges are expected beyond Q1.

Derrick Wood asked about the company's focus on winning large, multi-thousand-seat enterprise deals. He also inquired if early AI-related revenue suggests a setup for more significant AI monetization next year.

Answer

Co-CEO Eran Zinman confirmed a focus on landing large enterprises but stressed a continued commitment to the SMB and mid-market segments. Co-CEO Roy Mann affirmed that the current AI monetization model is providing valuable feedback to drive adoption, which they expect will lead to increased consumption and revenue over time as new AI products are rolled out.

Derrick Wood asked about the robocall market's impact on the voice business and Twilio's long-term strategy there, as well as whether recent international regulatory changes have affected the business.

Answer

CEO Khozema Shipchandler clarified that fraudulent robocalling is actively blocked and the AI opportunity lies in sophisticated customer care, not robocalls. He stated that regulatory changes have no short-term impact due to proactive engagement, and could be a mild long-term positive by improving ecosystem compliance.

Cole, on behalf of Derrick Wood from TD Cowen, asked for an update on the federal pipeline in light of the 'DOGE' initiatives and the company's strategy for AI-related pricing models.

Answer

CEO Matt Calkins noted that DOGE has created lasting positive trends, including a government preference for direct software provider engagement and a focus on efficiency, which benefits Appian. Regarding pricing, Calkins described a gradual migration from seat-based to consumption models to adapt to AI's impact, while CFO Serge Tanjga emphasized that Appian's strong value proposition supports successful price increases regardless of the model.

Derrick Wood asked about the Data Fabric feature, seeking details on common data sources customers are connecting to and the key vendors or systems Appian is integrating with. He also requested color on demand trends and pipeline health across core verticals like financial services and government.

Answer

CEO Matt Calkins highlighted Data Fabric's ability to access distributed data from diverse sources like relational databases and text repositories as a key competitive advantage. Interim CFO Mark Lynch stated that Q4 performance and the current pipeline were equally distributed across the four key verticals: financial services, public sector, insurance, and life sciences, with success in other areas as well.

Derrick Wood from TD Cowen asked for more detail on the strong sequential rebound in net new customers, particularly in the >$50k cohort, questioning if it was driven by seasonality, organic improvement, or pricing changes.

Answer

CFO Amanda Whalen attributed the growth in total customers to product-led initiatives in the entrepreneur segment, not seasonality, such as a redesigned login page and a simplified payment step. For the >$50k cohort, she reported a record number of net adds from both new lands and expansions, providing an example of a customer growing into the cohort by adding the marketing analytics product.

Derrick Wood asked about the revenue unlock from expanding SMS into new countries, questioning if it would be immediate from pent-up demand or result from a longer cross-sell cycle.

Answer

Co-Founder and CEO Andrew Bialecki described the impact as a mix of both. He noted an initial uptick from customers who were waiting for the expanded coverage, as well as a longer-term benefit as other clients migrate from existing contracts. He stressed that broad regional SMS coverage is a key differentiator for multi-country businesses, driving increased demand in the mid-market and enterprise segments internationally.

James Wood, on behalf of Derrick Wood at TD Cowen, asked for details on the Q4 operating margin guidance, specifically the seasonal factors driving compression in gross margin and the increase in sales and marketing spend.

Answer

CFO Amanda Whalen confirmed the Q4 margin profile reflects typical seasonality. This includes gross margin pressure from higher holiday sending volumes and a deliberate increase in marketing spend to support customers during their most critical sales period. She noted that excluding a new bonus accrual, the guidance is consistent with historical patterns.

Derrick Wood from TD Cowen asked about the impact of the Rimini II litigation settlement on closing deals, the effect of the current macroeconomic environment on spending, and the future outlook for litigation costs.

Answer

CEO Seth Ravin explained that the settlement removes a significant blocker for a group of customers and partners who were previously hesitant, creating new opportunities. He also noted that global market instability and deglobalization trends are creating demand for Rimini Street's flexible solutions. CFO Michael Perica added that while litigation expenses will decrease, there will be ongoing wind-down costs associated with the PeopleSoft business, with more details to be provided at the upcoming Analyst Day.

Jared, on behalf of Derrick Wood, requested more detail on the financial impact and timeline of the Oracle PeopleSoft wind-down, the performance of the new VMware support business, and the key drivers behind the recent strength in new logo acquisition.

Answer

CEO Seth Ravin explained that the PeopleSoft wind-down timeline is uncertain due to varying contract lengths, but new business has ceased. He stated the VMware business is performing well, with a strong pipeline and active customers across all continents, offering clients a way to gain time and optionality against forced price increases. Ravin attributed the strength in new logo acquisition to a renewed focus and a strategic restructuring of the North American sales team to concentrate exclusively on acquiring new clients, separating them from the 'farming' team that handles cross-sells.

Derrick Wood of TD Cowen asked about the extent of structural change expected from the field realignment efforts and the timeline for seeing results. He also questioned the divergence between strong growth in $1M+ customers and weaker growth in $100k+ customers.

Answer

CEO Jay Kreps indicated that while the realignment is not a complete reorg, adjustments have been made to address things that 'weren't quite right,' and they are already seeing good forward momentum. Regarding customer cohorts, Kreps reiterated that landing new customers is a key focus, and the CSP takeout initiative is a prime opportunity to drive growth in the sub-million-dollar segments. CFO Rohan Sivaram added that penetrating larger customers with the DSP portfolio is a huge opportunity and a major focus to drive performance across the entire customer funnel.

Derrick Wood of TD Cowen asked for the drivers behind the significant revenue outperformance in Q2 and questioned whether the notable jump in the technology workflows mix was a one-time event or the start of a new trend.

Answer

President & CFO Gina Mastantuono explained the revenue beat was driven equally by strong net new ACV execution and early on-prem renewals. She advised against over-analyzing quarterly workflow mix shifts but highlighted exceptional strength in ITAM, which grew over 70% YoY and landed its largest deal ever, and Security and Risk.

Derrick Wood from TD Cowen asked about the potential impact of AI on developer job growth and how GitLab is observing seat growth trends during customer renewals.

Answer

CEO Bill Staples stated his belief that AI will ultimately create more opportunities, increasing the number of code creators and the volume of code, which benefits GitLab. CFO Brian Robbins added that seat expansion contributed approximately 80% of the Dollar-Based Net Retention Rate, driven by a large deal and Duo add-ons. He also noted that recent reports suggest developer hiring has turned positive.

Derrick Wood of Cowen and Company noted the impressive 18% operating margin and asked about the balance between growth investments and margin expansion, particularly regarding go-to-market and sales capacity.

Answer

CFO Brian Robbins reiterated GitLab's philosophy of prioritizing growth responsibly, allowing revenue outperformance to flow to the bottom line. For the upcoming year, he stated that major investments will be in sales capacity and R&D, with a focus on AI and security. He explained that since the management structure is in place, hiring is focused on adding capacity, guided by a detailed model that plans for new rep hiring based on performance and ramp times.

On behalf of Derrick Wood of TD Cowen, an analyst asked for an update on benefits from the go-to-market changes and the expected revenue impact from new AI products this year.

Answer

CEO Stephen McMillan noted the go-to-market team is successfully pivoting to analytics and AI use cases, driving pipeline growth. He stated that while AI products are generating significant interest and driving platform usage, their direct revenue impact is more likely to be seen next year rather than in 2025.

On behalf of Derrick Wood, an analyst inquired about customer adoption of open table formats and the medium-term outlook for the cloud net expansion rate (NRR), which has recently declined.

Answer

CEO Stephen McMillan described open table format support as a critical, long-term capability, noting that while it's "early days" for adoption, it's a key topic in all customer conversations. CFO Claire Bramley stated that the cloud NRR will reflect ARR seasonality and "could decelerate before it then reaccelerates over time," as H1 is weighted to migrations and H2 to expansions.

Derrick Wood asked about customer adoption trends for open table formats like Apache Iceberg and whether the shift in cloud migration behavior could be related to companies contemplating such data storage strategies.

Answer

CEO Stephen McMillan described the adoption of open table formats like Iceberg and Delta Lake as a 'great opportunity' for Teradata to expand its total addressable market. He confirmed that Teradata's cloud lake platform supports these formats, which enables the company to address unstructured data in native object stores, a key area for future growth, and is not seen as a headwind.

On behalf of Derrick Wood, Cole Erskine inquired about demand trends for non-Microsoft ecosystems like Google and Salesforce, and asked for a breakdown of planned sales and marketing investments.

Answer

CEO Tianyi Jiang observed that while there is significant experimentation in non-Microsoft ecosystems, enterprise-wide deployment is still in single-digit percentages as data preparation remains the primary focus. CFO James Caci explained that S&M investments will be made across both direct and indirect channels, including personnel and technology, to support growth in 2026 and beyond.

On behalf of Derrick Wood, Cole asked how the emergence of AI agents might shape future demand for the Control suite and what specific factors are driving improved sales efficiency.

Answer

CEO Tianyi Jiang responded that while AI agents are in early stages, their increased automation will make a solid data foundation even more critical, reinforcing the value of AvePoint's platform. CFO Jim Caci attributed improved sales efficiency to enhanced productivity from both new and tenured sales reps, as well as the continued maturation and efficiency gains from the company's channel strategy.

Jared Dundon, on for Derrick Wood of TD Cowen, asked for an update on market dynamics between legacy system displacements and greenfield opportunities.

Answer

Co-Founder and CEO Tom Shea stated that there has been no change in their core market, which remains focused on replacing legacy systems. He explained that the new CPM Express offering is specifically aimed at the greenfield market, providing an easier, prescriptive on-ramp for companies earlier in their finance maturity. He stressed that CPM Express uses the same underlying platform, allowing these new customers to grow without ever having to migrate off OneStream.

Derrick Wood of TD Cowen highlighted the impressive billings growth on a tough comparison and asked if any outsized bookings or timing of renewals drove the strength, and for any directional factors for Q4 billings.

Answer

CFO Bill Koefoed confirmed that billings performance was better than expected with no changes in contract duration. He attributed some of the outperformance to strong collections and a notable trend where customers showed a 'strong desire to start right away' in Q3, rather than delaying contract effective dates into the next quarter, which pulled some billings forward.

Inquired about the drivers of net revenue retention pressure, asking if it was due to expansion weakness or churn, and whether customers were moving from paid products to open source.

Answer

The company stated that customers moving from commercial offerings to open source is an uncommon 'anti-pattern'. The pressure on net retention is primarily driven by smaller expansion and extension deal sizes, not by significant churn.