Ittai Kidron

Ittai Kidron asked for more details on the mid-teens ARR growth for core ZIA/ZPA, including its performance over recent quarters and future expectations.

Answer

CFO Kevin Rubin stated that ZIA/ZPA has shown consistent performance, forming the foundation for Zero Trust Everywhere. He emphasized the massive remaining opportunity for ZIA/ZPA among potential customers and for upsells to other pillars, reiterating the underlying business's stability. Chairman and CEO Jay Chaudhry added that customers, on average, triple their initial purchase in four years.

Ittai Kidron of Oppenheimer & Co. asked Kevin Rubin for more color on the mid-teens ARR growth of Zscaler's core ZIA/ZPA business, specifically inquiring about its growth rate over the past few quarters and future expectations.

Answer

Kevin Rubin, CFO, Zscaler, noted consistent ZIA/ZPA performance, emphasizing its foundational role for Zero Trust Everywhere and the significant remaining market opportunity within existing customers and new prospects. Jay Chaudhry, Chairman and CEO, Zscaler, added that customers on average triple their initial purchase in four years.

Ittai Kidron from Oppenheimer & Co. Inc. asked about Zscaler's strategy for maintaining salesforce focus amid a rapidly expanding product portfolio and the rollout of the new Z-Flex purchasing program, questioning its scope and potential bottlenecks.

Answer

CEO Jay Chaudhry explained that Zscaler uses a two-tier sales model with a broad, account-centric team supported by specialized "takeoff teams" for new products. He noted that the Z-Flex program, which originated from customer demand for flexibility and simpler procurement, had a strong start with over $65 million in TCV bookings. The program will be rolled out prudently, starting with larger customers before expanding.

Ittai Kidron requested an update on the company's full-year ARR target and asked for a breakdown of the largest components within the emerging products category, as well as their current percentage of new business activity.

Answer

CFO Remo Canessa confirmed that Zscaler is on track to meet its $3 billion ARR target for the fiscal year. CEO Jay Chaudhry identified ZDX as the largest component of emerging products, followed by Zero Trust branch solutions, workload protection, and new AI products. He reiterated that emerging products are expected to comprise the mid-20% range of new and upsell business for the year.

Ittai Kidron pressed for more detail on the billings guidance, specifically the significant difference in year-over-year growth between the first half (7%) and the second half (23%).

Answer

CFO Remo Canessa explained that the lower growth in scheduled billings for the first half of FY25 is a direct result of a more challenging macro environment during the first halves of FY23 and FY24, which impacted bookings at that time. He reiterated that the business is also becoming more second-half weighted, and the 23% growth in H2 reflects contracted billings from stronger prior periods.

Ittai Kidron from Oppenheimer & Co. Inc. inquired about the demand patterns and distinctions of the new B2 Neo Cloud solution compared to B2, including pricing and margin differences. He also sought clarification on why the recently announced large deal would take a year to generate revenue, the contract duration, and the long-term outlook for the computer backup business.

Answer

Gleb Budman, Co-founder, CEO, and Chairperson of the Board, explained that B2 Neo is a white-label offering for NeoClouds, providing high performance, low cost, durability, and scalability with API integration, unlike B2 which is sold directly. He noted the one-year delay for the large NeoCloud deal is due to integration work required by both parties, which will also benefit other providers. Marc Suidan, Chief Financial Officer, added that the large deal necessitates accelerated capital expenditures, impacting gross margins by a few hundred basis points, but the overall economic model remains similar due to lower OpEx. For computer backup, Marc Suidan projected a 5% year-over-year decline for 2026, with Gleb Budman stating efforts are underway to stabilize or slightly grow this business long-term.

Ittai Kidron from Oppenheimer inquired about the demand patterns for neoclouds, how B2 Neo differs from B2 in terms of demand, pricing, and margin, and the reasons for the delayed revenue recognition from the large neocloud deal. He also asked about the duration of the $15+ million TCV contract, potential upfront cost impacts on gross margin from ramping neoclouds, and the long-term outlook and quarterly cadence for the computer backup business.

Answer

Gleb Budman (Co-founder, CEO and Chairperson, Backblaze) explained that B2 Neo is a white-label offering for neoclouds, providing API integration and single sign-on, leveraging existing Backblaze technology. He clarified that the delay in revenue for the large deal is due to both Backblaze's development work and the customer's integration efforts, noting this work is broadly useful for other neocloud providers. Marc Suidan (CFO, Backblaze) stated that the large deal requires accelerated capital expenditures, impacting gross margin by a few hundred basis points, but the overall economic model remains similar due to lower OpEx. For computer backup, Marc Suidan projected a 5% year-over-year decline for 2026, with Q1 at -3%, while Gleb Budman expressed a desire to stabilize or slightly grow this business long-term. Gleb also clarified the TCV was $15+ million and the duration was three years.

Ittai Kidron asked about the potential addressable market for B2 OverDrive among existing customers, the possibility of tiered pricing, and the strategy for the Computer Backup business, including potential price increases.

Answer

CEO Gleb Budman explained that B2 OverDrive is ideal for multi-petabyte AI and high-performance computing customers, but the company aims to keep pricing simple to avoid the complexity of competitors. CFO Marc Suidan and Budman stated the focus has been on B2 growth, but a 'tiger team' is now applying learnings to the Computer Backup business, leveraging new features like Legal Hold. They confirmed there are no current plans for a price increase.

Ittai Kidron asked for details on AI use cases, the key factors required to achieve the guided B2 growth acceleration, and the long-term strategy for the Computer Backup business.

Answer

CEO Gleb Budman detailed that AI customers use Backblaze across the entire data pipeline, from collection to model training and inference, often in multi-cloud GPU environments. CFO Marc Suidan noted that achieving B2 growth acceleration depends on consistent execution and ramping new sales capacity. Budman added that while the consumer backup market is declining, the business backup segment holds opportunity.

Ittai Kidron asked for details on the 12% workforce reduction, the expected exit cash balance upon reaching free cash flow positivity in Q4 2025, and the confidence level in the sales team's ability to adapt to the new go-to-market strategy and achieve acceleration by Q2 2025.

Answer

CFO Marc Suidan stated the workforce reduction was broad-based, with a notable shift in marketing from headcount to demand generation spend. He did not provide a specific 2025 exit cash balance but expects it to be stable before turning positive. CEO Gleb Budman expressed high confidence in the sales transformation, citing strong early indicators like a record, higher-quality pipeline and significant new deals closed under the new leadership.

Ittai Kidron asked CFO Ed Grabscheid about the growth rate of JFrog's core business excluding security revenue, and CEO Shlomi Ben Haim about the greatest risks to the business in 2026, particularly how AI could pose a risk.

Answer

JFrog CFO Ed Grabscheid stated that security's revenue contribution is still relatively small, and JFrog goes to market as a platform, selling Artifactory and security together, so they do not carve out security's growth rate. JFrog CEO Shlomi Ben Haim identified the biggest risk as getting "confused" and following trends instead of focusing on JFrog's core value proposition as the system of record for binaries. He emphasized that binaries remain the primary asset, a belief reinforced by industry figures like Elon Musk.

Ittai Kidron asked about the growth rate of JFrog's core business when excluding security revenue, and what management perceives as the greatest risks to the business in 2026, particularly from the evolving landscape of AI.

Answer

JFrog CFO Ed Grabscheid stated that security revenue is a relatively small component, and JFrog sells its offerings as a unified platform, thus not carving out core business growth. JFrog CEO Shlomi Ben Haim identified the primary risk as losing focus on JFrog's core differentiation as the system of record for binaries, especially as AI accelerates binary creation, reinforcing their foundational mission.

Ittai Kidron sought clarification on Datadog's 2026 guidance assumptions, including the level of conservatism, the assumed growth for the largest customer, and whether any concentrations are emerging within the AI cohort, excluding the largest customer. He also asked for the AI cohort's percentage of revenue for the quarter.

Answer

David Obstler, CFO of Datadog, explained that the guidance applies the same conservative approach to organic growth, attach rates, and new logo accumulation. He noted that the core business (excluding the largest customer) is assumed to grow faster than the largest customer, for which a very conservative assumption was taken. He also stated that the 650 AI-native customers are diversified, similar to the overall business, with no unusual concentrations.

Ittai Kidron asked about the level of conservatism built into Datadog's 2026 guidance, the assumptions for the largest customer's growth, and whether any concentrations are evolving within the AI cohort, excluding the largest customer.

Answer

David Obstler, CFO, Datadog, stated that the guidance approach is consistent, discounting organic growth and attach rates. He noted that the guidance implies the core business (excluding the largest customer) grows faster than the largest customer, for which a conservative assumption was taken. He also mentioned the 650 AI-native customers are diversified, with significant growth but no unusual concentration.

Ittai Kidron inquired about Datadog's sales efficiency in relation to its sales capacity increase, asking about the percentage of salespeople hitting quota relative to historical patterns and anticipated changes in the 2026 compensation structure given product breadth and opportunities.

Answer

Olivier Pomel, Co-Founder and CEO, Datadog, stated that the focus is on scaling capacity while maintaining productivity. He explained that compensation plans are continually tweaked to direct the salesforce's focus towards newer, smaller, and tougher-to-land larger customers, with recent changes showing success.

Ittai Kidron inquired about Datadog's sales efficiency, specifically asking about the percentage of salespeople hitting quota relative to historical patterns, and whether any material changes to the comp structure are anticipated for 2026 given the breadth of products and opportunities.

Answer

CEO Olivier Pomel stated that sales productivity is good, with a focus on scaling capacity while maintaining productivity. He noted continuous adjustments to comp plans to ensure the salesforce focuses on newer, smaller customers and multi-year land deals, which are crucial for long-term growth.

Ittai Kidron asked which of the newer products have the best chance of reaching $100 million in ARR, and also requested any initial thoughts on customer investment priorities for 2025.

Answer

CEO Olivier Pomel declined to single out specific products but reiterated that products like Database Monitoring are on a strong trajectory, and the goal is for all new products to eventually exceed $50 million in ARR. Regarding 2025, he did not provide guidance but stressed that Datadog is investing heavily in engineering and sales capacity, which will be reflected in future plans.

Ittai Kidron asked for an update on the progress of the Security Strike teams and whether third-party agents could potentially disintermediate Dynatrace Intelligence, reducing Dynatrace's direct customer engagement.

Answer

Rick McConnell, CEO of Dynatrace, stated that security remains an important and growing business, focused on the observability buyer. He reiterated that LLMs or third-party agents are unlikely to replicate Dynatrace's capabilities due to the complexity of dynamic enterprise environments and the platform's architectural moat.

Ittai Kidron (Oppenheimer) asked for an update on the security strike teams' progress and questioned whether third-party agents or LLMs could disintermediate Dynatrace Intelligence, potentially reducing Dynatrace's direct customer engagement and value.

Answer

Rick McConnell, CEO, reported that security remains an important and growing business, with ongoing progress and a strategy focused on the observability buyer. He reiterated that LLMs are unlikely to replicate Dynatrace due to the complexity of highly variable enterprise environments and Dynatrace's unique architectural foundation and domain expertise.

Ittai Kidron inquired about the progression and growth patterns in the Americas region, particularly given significant investments and its 34% revenue growth.

Answer

CFO Drew Del Matto confirmed Americas revenue grew 34%, consistent with EMEA. CEO and Co-founder Sanjay Beri added that the focus in the Americas is on ramping new sales representatives, contributing to consistent growth across all geographies.

Ittai Kidron asked for color on Netskope's progression and growth pattern in the Americas region, noting that its growth rate was similar to other regions despite significant investments.

Answer

Drew Del Matto, CFO, Netskope, confirmed that Americas revenue grew 34%, similar to EMEA, with APJ slightly lower. Sanjay Beri, CEO and Co-founder, Netskope, added that the focus in the Americas has been on recruiting and ramping new sales representatives, resulting in consistent growth across all geographies.

Ittai Kidron inquired about Okta's AI capabilities, specifically whether customers need to be existing Okta users to deploy them, the potential dollar uplift for customers spending around $100,000, and if the go-to-market strategy might shift towards bundling with agent companies rather than direct enterprise sales.

Answer

CEO Todd McKinnon expressed excitement about customer interest in AI capabilities, noting that many companies are stuck between generic AI and over-permissioned data access. Okta helps by filtering access for AI agents, observing behavior, and enabling secure use cases without over-permissioning. He highlighted that the AI security TAM could exceed the combined workforce and customer identity TAMs. Todd McKinnon confirmed that the go-to-market can evolve, with efforts already underway to set industry standards like Cross-App Access, which is now an extension of the Model Context Protocol (MCP). President and COO Eric Kelleher added that Auth0 for AI Agents supports cross-app access out of the box, ensuring discoverability and precise management.

Ittai Kidron of Oppenheimer & Co. Inc. asked for a breakdown of the Q1 business contribution from seats, new products, and cross-sell relative to the company's plan, and requested an update on new products as a percentage of bookings.

Answer

CFO Brett Tighe described Q1 as a nice quarter for new products and a particularly strong quarter for new business. He noted that while the pipeline remains tilted toward upsell and cross-sell, all areas performed well. Regarding new products as a percentage of bookings, he stated it was 'in the zip code as the last few' quarters.

Ittai Kidron asked why full-year cRPO guidance wasn't provided and requested an update on the business progress and contribution from Privileged Access Management (PAM).

Answer

CFO Brett Tighe stated that Okta's policy is to only guide cRPO one quarter at a time. CEO Todd McKinnon addressed PAM, noting it's part of the new products that constituted 20% of Q4 bookings. He highlighted a Q4 deal with a Global 2000 financial services firm that added PAM, ISPM, and ITP, increasing the account's ARR by over 30%. He emphasized the market is moving toward a single, integrated identity platform for governance, PAM, and access management, positioning Okta favorably against point solution vendors.

Ittai Kidron requested a breakdown of Elastic's 30+ million-dollar deals into renewals versus new customers and inquired about any unusual deal movements (pushed from Q1 to Q2 or pulled from Q3 to Q2). He also asked for more granular detail on the sales-led guidance breakdown between cloud and self-managed.

Answer

CEO Ash Kulkarni stated that typical deal movements between quarters were normal in Q2. For the five deals over $10 million TCV, one was a new logo (a large chemical manufacturer), with the rest being a mix of security, observability, and AI expansions. CFO Navam Welihinda reiterated that Elastic does not have an internal breakdown or separate targets for cloud versus self-managed for its sales team, as it views them as one platform and sales motion. He emphasized that the sales-led guidance reflects overall commitment and consumption momentum.

Ittai Kidron asked for a breakdown of the 30+ large deals (>$1M) into renewals versus new customers, and whether any deals were pushed out from Q1 or pulled in from Q3. He also requested a more granular perspective on the breakdown of sales-led subscription guidance (cloud vs. self-managed) for Q3, and if Q2 outperformed or underperformed internal targets for either.

Answer

CEO Ash Kulkarni stated that typical deal movement between quarters happened normally in Q2, excluding government shutdown dynamics. For the five deals >$10M TCV, one of the largest (a chemical manufacturer) was a new logo, indicating a good mix of expansion and new logos. CFO Navam Welihinda reiterated that there are no internal breakdowns or separate targets for cloud vs. self-managed for the sales team, as Elastic views it as one platform and one sales motion, meeting customers where they are. He stated the sales-led guidance reflects strong commitments, large deal momentum, and consumption momentum.

Ittai Kidron from Oppenheimer & Co. Inc. asked for a breakdown of new versus existing customers adopting Search AI, its penetration rate, and details on the top competitors in both GenAI and SIEM.

Answer

CEO Ashutosh Kulkarni explained that GenAI adoption is a mix of new customers attracted by vector search and existing customers expanding their use cases, with significant room for growth across the installed base. In SIEM, he identified competition as legacy players like Splunk, QRadar, and ArcSight. For GenAI, he noted competition comes from pure-play vector databases and other data platforms adding vector functionality, but Elastic's strength is in unstructured data.

Ittai Kidron asked about the linearity of product billings, specifically if product growth might decelerate in the second half of next year, given the end-of-life cycle completion and difficult comparisons, and followed up on the percentage of SaaS billings that are standalone SD-WAN.

Answer

Christiane Ohlgart, CFO, clarified her previous comment was on service *revenue* and expressed confidence in solid product revenue growth for next year based on multiple drivers, without providing specific guidance. Ken Xie, Founder, Chairman, and CEO, reiterated his belief in a normal 10-15% product/hardware growth rate for the next 5-10 years, driven by market share gains in fragmented markets. Regarding SaaS billings, Ken Xie explained SD-WAN is part of FortiOS, making precise tracking difficult, but emphasized Fortinet's leading SD-WAN position and its role in quick SaaS migration. John Whittle, COO, noted that disruption from SD-WAN market acquisitions creates opportunities for Fortinet's combined solution.

Ittai Kidron sought clarification on the linearity of product billings, asking if product growth might decelerate in the second half of next year due to the completion of end-of-life cycles and difficult comparisons. He also asked about the percentage of SaaS billings that are still standalone SD-WAN.

Answer

Christiane Ohlgart, CFO, clarified that the H2 2026 acceleration comment was for *revenue*, not billings, and expressed confidence in solid product revenue growth for next year based on multiple drivers. Ken Xie, Founder, Chairman, and CEO, emphasized that the fragmented market across Fortinet's three pillars allows for continued market share gains, driving product revenue growth for the next 5-10 years. Regarding SaaS billings, Ken Xie explained that SD-WAN is an integral part of FortiOS, making precise standalone tracking difficult, but noted Fortinet's leadership in SD-WAN facilitates quick customer migration to SaaS. John Whittle, COO, added that disruption from competitor SD-WAN acquisitions creates opportunities for Fortinet's combined solution.

Ittai Kidron asked for the specific revenue contribution from the hardware upgrade cycle in Q4 and in the 2025 guide. He also asked if SASE adoption is primarily displacing competitors (brownfield) or entering new environments (greenfield).

Answer

CFO Keith Jensen explained that precise data is difficult due to the two-tier distribution model, especially in SMB, but they are working with channel partners to improve data gathering. CEO Ken Xie pointed to a slide showing SASE penetration at around 10% of the install base. An unnamed executive clarified that some of the biggest SASE deals are indeed displacements of legacy VPN or SASE providers, indicating a significant brownfield opportunity.

Ittai Kidron of Oppenheimer & Co. Inc. requested color on the U.S. versus international revenue mix for the quarter and asked if there were any changes in contract duration affecting RPO.

Answer

CFO Barbara Larson reported that international revenue constituted 38% of the total, an increase from the prior quarter, showing nice performance. Regarding RPO, she confirmed that contract duration was relatively stable in Q2 with no major changes to highlight.

Ittai Kidron of Oppenheimer & Co. Inc. asked about the progress of sales productivity and bundled platform sales, and also requested specifics on where elongated sales cycles were most pronounced by region and vertical.

Answer

CEO Tomer Weingarten stated that elongated sales cycles were a global phenomenon, most pronounced in larger enterprise deals, while the mid-market remained strong. He highlighted progress in platform adoption, with the data business surpassing $100M in ARR and Purple AI driving price uplifts.

Ittai Kidron from Oppenheimer & Co. Inc. asked about the growth of the core business, excluding SIEM, identity, and cloud. He noted its ARR growth has decelerated from 18% a year ago to 11% now and asked about the outlook for this core segment.

Answer

Founder & CEO George Kurtz pushed back on separating the "core" business, stating he views it as a single platform where modules like EDR are foundational. He explained that the telemetry from the initial deployment is what enables the high-growth identity, cloud, and Next-Gen SIEM modules. Kurtz asserted that the company continues to innovate and win new business across the entire platform because customers are seeking the best technology to stop breaches, which is what CrowdStrike provides.

Ittai Kidron asked about the go-to-market motion for the AI opportunity, questioning if it requires a more targeted approach beyond the standard enterprise versus self-serve split. He also inquired about the mix of multiyear versus annual deals in the non-Atlas business and the rationale for customers choosing multiyear contracts.

Answer

President & CEO Dev Ittycheria explained that the company has a proven model for transitioning fast-growing self-serve customers to a high-touch sales model when needed. CFO Mike Berry stated that the company does not break out the percentage of multiyear deals but noted the rationale remains consistent: customers want to lock in pricing for their long-term strategic platforms.

Ittai Kidron of Oppenheimer requested specific proof points on the progress of the upmarket enterprise strategy and asked for clarification on the slower-than-planned headcount growth and the rationale for the revenue guidance raise.

Answer

CEO Dev Ittycheria highlighted that 75% of the Fortune 100 are already customers and that the focus is on expansion, citing recent strategic discussions with large enterprises. CFO Mike Berry explained that the headcount slowdown was broad-based, not a pullback, and the prudent guidance reflects rolling forward the Atlas beat while accounting for timing in the non-Atlas business amid macro uncertainty.

Ittai Kidron asked if Commvault was observing any customer budget pull-forwards from calendar 2026 into 2025, a trend seen in the channel. He also inquired about any changes to sales compensation plans for the new fiscal year.

Answer

CFO Jen DiRico responded that the company is not seeing any budget pull-forwards and attributes the strong performance to market strength, product fit, and solid execution. Regarding compensation, she stated that while details are not public, plans are structured as pay-for-performance and incentivize the sales team to drive overall recurring revenue.

Ittai Kidron asked about the guidance philosophy for 2025, seeking to understand the potential for upside given the new acquisitions of Venafi and Zilla.

Answer

CFO Erica Smith stated that the guidance philosophy for 2025 is very similar to 2024. It assumes no major changes in the macroeconomic environment and projects a net new organic ARR figure similar to the prior year. She indicated that while there is significant opportunity with the new acquisitions, the fundamental approach to guidance has not changed.

Ittai Kidron inquired about the breadth of customers with over 10,000 seats and asked if there was a risk of seat cannibalization resulting from the adoption of monday.com's new AI solutions.

Answer

co-CEO Eran Zinman noted the potential for more large deals in 2025 but found it hard to predict specific timing. Regarding AI, he explained that the decision to price based on consumption rather than seats was made specifically to avoid cannibalization, allowing customers to scale automation and capabilities independently of their user count.

Ittai Kidron commented on the underwhelming performance of monday dev and asked what needs to change in its product or go-to-market strategy. He also inquired about the evolution and monetization timeline for the company's AI blocks.

Answer

Co-CEO Eran Zinman stated that while monday dev may not be growing as fast as CRM, the company is pleased with its progress and focus on software developers. He noted that the go-to-market has been refocused, which may slow net adds in the short term but builds a strong long-term foundation. Regarding AI, Zinman highlighted strong adoption growth and said the company plans to roll out monetization over time where it provides clear value, potentially in 2025, though Co-CEO Roy Mann added it is not modeled into the 2025 plan.

Ittai Kidron requested a quantification of the EPS impact from convertible note dilution and higher interest expense in the FY25 guide. He also questioned why the FY25 operating margin guidance wasn't higher, and asked about the risks of managing multiple go-to-market motions and the potential for higher churn from ShareFile.

Answer

EVP & CFO Anthony Folger quantified the year-over-year EPS headwind at approximately $0.75 from interest expense and $0.20 from convert dilution. He explained the margin guide reflects ShareFile's initial sub-20% margin, which will improve throughout the year. CEO Yogesh Gupta defended the multi-channel GTM strategy as highly efficient. Both executives noted ShareFile's net retention is similar to Progress's and its churn profile is manageable and in line with other high-velocity products.

Ittai Kidron inquired about remaining 'low-hanging fruit' in go-to-market improvements and future sales compensation changes for DSP, and also asked for clarification on whether win rates improved generally or just against smaller vendors.

Answer

CEO Jay Kreps explained that after this year's 'radical' GTM shift, future changes will be minor 'tuning.' He noted that maturing DSP products will enable a new motion of landing use cases directly. He clarified that win rates improved overall, and the specific call-out of >90% against startups was to address a particular point of interest.

Ittai Kidron pressed for assurance that the Q2 churn was not a sales execution issue and asked for a definition and quantification of the 'strategic projects' expected to close in the second half.

Answer

CEO Matthew Cain asserted that the churn was isolated and not a sales execution problem, pointing to the third-highest gross ARR quarter in company history as evidence of strong demand. He defined strategic projects as deals with potential for 7-figure plus ARR increases and noted there are 'many' such opportunities in the back-half pipeline. CFO Gregory Henry added that most of these deals have a compelling event, like a renewal, in the second half.

Asked to differentiate the impact of a better environment versus internal initiatives on the FY25 guidance and questioned if the guided 'U-shape' recovery would apply to other key metrics like customer adds and expansion rate, which had decelerated.

Answer

The internal initiatives (GTM, commercial differentiation, cloud focus) are already in progress and are expected to contribute significantly to FY25 performance, not just FY26. The U-shaped recovery in bookings is expected to lead to a similar recovery pattern in other key metrics like $100k customer adds and revenue growth. The drop in total customer count was attributed to small, non-material pay-as-you-go customers moving to the free tier.