Joe Vruwink

Joe Vruwink asked if recent AI releases, particularly Windchill AI Parts Rationalization, are becoming more material and will noticeably impact demand decisions over the next year, following earlier foreshadowing at PTC's user community event.

Answer

CEO Neil Barua confirmed significant progress in PTC's AI strategy, highlighting customer demand for embedded AI in mission-critical systems like Windchill and Codebeamer. He noted the recent Windchill AI Parts Rationalization and Codebeamer AI releases, anticipating these will become a substantial economic driver as they scale beyond initial deployments, despite current immaterial P&L impact.

Joe Vruwink asked about the potential for recently released AI capabilities, specifically Windchill AI Parts Rationalization, to drive more material demand decisions over the next year, given past customer excitement.

Answer

Neil Barua (CEO, PTC) expressed enthusiasm for the progress in embedding AI directly into mission-critical systems like Windchill and Codebeamer, noting strong customer reception. He stated that while the economic impact is currently immaterial, it is expected to become a real economic driver as POCs scale over the next few years.

Joe Vruwink asked about the new packaging for Windchill, specifically the enterprise user and role-based packages, and whether this new structure is a more effective way to drive deeper adoption and ecosystem expansion.

Answer

President and CEO Neil Barua enthusiastically agreed, stating the questioner 'nailed it.' He explained the new packaging is strategically designed to simplify PLM expansion, ease migration to SaaS, and facilitate customer consumption of embedded AI capabilities. He noted the timing aligns with the broader corporate strategy to position PLM as the epicenter of PTC's vision.

Joe Vruwink questioned the composition of Manhattan Associates' new bookings for 2026, specifically how the company plans to maintain a healthy bookings component despite new logos balancing back to normal, suggesting cross-sell and migration as key drivers. He also asked about strategies to de-risk the services outlook, such as fixed-timeline propositions, given past challenges.

Answer

President and CEO Eric Clark clarified that new bookings encompass new logos, expansion within existing accounts, and on-premise to cloud conversions, highlighting expansion as a significant market share opportunity. He reiterated the long-term 'rule of thirds' for sales mix. Regarding services, he noted that strong Q4 and full-year bookings, fixed ramp timelines, and fixed-fee conversions provide clarity and potential upside, contributing to a de-risked outlook.

Joe Vruwink asked about the new bookings component of RPO for 2026, specifically how the expected balance back from high new logo contribution in 2025 would be offset by accelerated migration and cross-sell. He also sought insights into de-risking the services outlook, particularly regarding fixed-fee, fixed-timeline propositions.

Answer

President and CEO Eric Clark clarified that new bookings encompass new logos, expansion within existing accounts, and on-premise to cloud conversions. He emphasized that expansion and cross-selling new products to existing customers represent significant market share opportunities. Regarding services, he stated that the confidence in the outlook is based on strong pipeline, new logo sales from the previous year, fixed ramp timelines, and the increasing volume of fixed-fee conversion deals, which could potentially lead to upside.

Joe Vruwink asked about the risk factors associated with Manhattan Associates' fixed-fee and time conversion strategy, specifically regarding implementation scope and budget. He also sought clarity on whether the preliminary 2026 parameters for subscription growth, services growth, and margin expansion align with previous expectations.

Answer

President and CEO Eric Clark explained that the fixed-fee strategy relies on the repeatability and similarity of customer cohorts, allowing confidence in scope and budget due to known extensions and warehouse counts. He added that leveraging automation and AI in conversions helps monetize acceleration and maintain margins. Mr. Clark confirmed that the consensus 2026 estimates are generally appropriate, with clear guidance to be provided on the next call.

Joe Vruwink asked about the risk factors associated with Manhattan Associates' fixed-fee and time conversion strategy and how the company manages these risks. He also sought clarification on whether the preliminary 2026 commentary regarding subscription growth, services growth, and margin expansion aligns with prior expectations.

Answer

President and CEO Eric Clark explained that the fixed-fee strategy relies on repeatability and similarity within customer cohorts, leveraging existing knowledge of their software deployments and extensions. He noted that increasing automation and AI in conversions allows the company to monetize acceleration while maintaining margins. Mr. Clark confirmed that the company is comfortable with the current consensus estimates for 2026, indicating that things are generally tracking as anticipated.

Joe Vruwink from Baird asked about the potential impact and timing of the four go-to-market investment areas and questioned what drove the strong RPO bookings performance in the quarter.

Answer

President & CEO Eric Clark detailed that the go-to-market changes, such as new sales leadership and partnerships with Google and Shopify, are expected to have a material impact next year. On bookings, Clark attributed the strong performance to solid sales execution and customers adapting to the macro environment, noting that the last three quarters have been the company's best ever for bookings despite market challenges.

Joe Vruwink asked when Roper Technologies expects to quantify the impact of AI more precisely, noting Aderant's strong growth, and sought insight into the potential magnitude of upside in the 2026 guidance if market conditions improve.

Answer

Neil Hunn, President and Chief Executive Officer, explained that Roper will not 'AI wash' revenue but aims to report AI revenue SKUs, acknowledging that AI monetization will also occur through cloud uplift and packaging. He noted that 2025 focused on AI product development, while 2026 will focus on commercialization. Regarding guidance, Neil Hunn reiterated a long-term entitled growth of over 8% for the portfolio, stating the initial 2026 guide is conservative with no assumed improvements for Deltek, DAT, or Neptune, implying potential upside if these factors inflect positively.

Joe Vruwink of Baird inquired when Roper Technologies expects to quantify AI's impact more precisely and if current organic improvement, excluding Deltek, is directly or indirectly related to AI investment. He also asked about the potential magnitude of upside in the 2026 guidance if market conditions improve.

Answer

Neil Hunn, President and Chief Executive Officer, stated that Roper will not 'AI wash' revenue but aspires to report AI-related revenue, acknowledging that monetization will occur through various channels like cloud uplift and packaging. He highlighted that 2026 will focus on commercializing AI products. Regarding guidance, Hunn reiterated a conservative initial guide, with a long-term entitled growth target of north of 8% for the portfolio.

Joe Vruwink asked for details on the impressive high-teens bookings growth, which businesses contributed, and whether this backlog could drive organic recurring revenue growth toward double digits. He also inquired about the P&L impact of AI, including on R&D spend and revenue timing.

Answer

EVP & CFO Jason Conley confirmed the strong bookings, highlighting Aderant's record quarter and solid healthcare performance, which supports the second-half guidance. President and CEO Neil Hunn explained that AI is already yielding internal productivity gains and generating tens of millions in direct ARR, with a larger pull-through effect on the broader tech stack. He emphasized the compounding nature of AI's impact on future growth, noting it will gain momentum into next year.

Joe Vruwink from Robert W. Baird & Co. Incorporated asked about the IP business, specifically if the mid-year timeframe for title availability and strategic elements like custom IP and business model changes would provide enough clarity to project a return to mid-teens growth for fiscal year 2027. He also questioned the cash flow performance, noting strong adjusted EBIT margins but lower cash flow, and if one-time cash items like restructuring would settle out in future years.

Answer

Sassine Ghazi, CEO of Synopsys, clarified that customer engagement for IP is ongoing, not waiting until mid-year, and expressed confidence in the IP portfolio given strong customer trust and the $11.4 billion backlog. Shelagh Glaser, CFO, confirmed that restructuring costs and tax on divestiture gains are one-time, non-recurring items. She reiterated the focus on achieving the long-term unlevered free cash flow margin target in the mid-30s, with a $700 million year-on-year improvement.

Joe Vruwink from Baird asked about Synopsys's efforts to diversify its customer base beyond its traditionally concentrated exposure, the timeframe for fully implementing the strategic changes in the IP business, and a clarification on the baseline changes in the updated guidance, specifically the impact of IP decline, Ansys addition, and China factors.

Answer

President and CEO Sassine Ghazi confirmed that Synopsys is actively working to expand its business and diversify its portfolio, with the Ansys acquisition expected to significantly aid in diversifying customer and regional concentration. He noted that the timeframe for fully enacting IP business changes is difficult to forecast due to customer situations. CFO Shelagh Glaser explained that the updated guidance primarily reflects the decline in IP revenue due to the three headwinds, partially offset by the addition of Ansys, with Ansys's full Q4 contribution being for all weeks but its historical strong period shifting to Synopsys's Q1.

Joe Vruwink inquired about the timeframe (e.g., two years) needed to fully implement changes in the IP business and diversify the customer base. He also asked for a breakdown of what factors (IP decline, Ansys addition, China) are driving the changes in the current guidance.

Answer

President and CEO Sassine Ghazi confirmed that contract lengths (2-3 years) are relevant for IP business changes and that Synopsys has de-risked part of its exposure to a large customer in FY2025. He emphasized Ansys will significantly diversify the portfolio in terms of customer and regional concentration. CFO Shelagh Glaser reiterated that the updated guidance fully incorporates the three IP headwinds, with Ansys's addition partially offsetting the IP decline.

Joe Vruwink asked about Synopsys's efforts to diversify its customer base, given its historical exposure to one outsized account, and whether a two-year timeframe is appropriate for fully implementing the planned IP business changes. He also requested a baseline understanding of the changes in the current guidance compared to previous guidance, specifically regarding IP decline, Ansys addition, and the China factor.

Answer

Sassine Ghazi, President, CEO & Director, Synopsys, affirmed the company's diversified customer base in EDA and IP, noting its success in capturing a large wallet share from leading semiconductor companies. He stated that part of the exposure to the large customer has been de-risked in FY2025, but forecasting future impacts is difficult. Ghazi emphasized that Ansys will significantly help diversify the portfolio in terms of customer and regional concentration (e.g., Europe vs. China). Shelagh Glaser, CFO, explained that the updated guidance fully incorporates the three IP headwinds, which are partially offset by the addition of Ansys. She reiterated that the biggest decline was due to the IP update, with Ansys's Q4 contribution being for the full quarter, but its historical strong period (November-December) now falls into Synopsys's Q1.

Joe Vruwink of Baird asked whether Synopsys would typically have received advance notice from the Commerce Department before news of potential restrictions emerged. He also inquired if the broader R&D landscape, including auto and industrial, is returning to the strong levels seen in 2021-2022.

Answer

CEO Sassine Ghazi stated that past experiences with advance notice have varied and reiterated that Synopsys has not received any notice from BIS regarding new restrictions. He confirmed a pickup in automotive and industrial design activity, noting that these customers are now focused on integrating more AI into their next-generation chips, which implies more sophisticated R&D investment.

Joe Vruwink of Baird asked whether Synopsys would typically receive advance notice from the Commerce Department regarding new restrictions. He also questioned if the observed pickup in non-AI R&D spending could signal a return to the very strong market environment of 2021-2022.

Answer

CEO Sassine Ghazi stated that past experiences with advance notice from BIS have varied and reiterated that the company has not received any new notice. He clarified that the current pickup in non-AI segments is for more sophisticated, AI-enabled chips, which drives new R&D investment, rather than being a simple cyclical recovery.

Joe Vruwink sought clarification on the organic growth rank ordering for fiscal 2027, where Network Solutions is fastest, Payment Processing second, and Subscription third, specifically asking if this ranking is purely organic and why Payment Processing would grow faster than Subscription.

Answer

Balaji Gandhi (CFO, Phreesia) confirmed that the stated rank ordering was specifically for organic growth, excluding the impact of AccessOne. He added that with AccessOne included, Payment Processing's growth might be neck and neck with or even surpass Subscription's growth.

Joe Vruwink sought clarification on the organic growth rank ordering for fiscal 2027 (network fastest, payment second, subscription third), specifically if it excludes AccessOne, and why payments would grow faster than subscriptions.

Answer

CFO Balaji Gandhi confirmed that the rank ordering was specifically for organic growth, excluding AccessOne. He noted that with AccessOne included, payments would likely be neck and neck or faster than subscriptions, and offered to follow up with more precise math.

Joe Vruwink asked if the non-recurring revenue benefit in Q1 signals a change in client engagement models or customer support, particularly for higher ROI opportunities.

Answer

CFO Balaji Gandhi clarified that the revenue was from the 'related services' component, which is an existing part of their business model and not a strategic shift. He stated it was called out for transparency and reflected the team's ability to quickly execute a project for an existing client, rather than a change in how Phreesia engages with customers.

Joe Vruwink asked about gross retention rates behind the net customer counts and whether the economics of the established installed base have improved. He also inquired about the expected conversion rate of EBITDA to free cash flow.

Answer

Executive Balaji Gandhi confirmed that economics within the established base have improved and stated that gross revenue retention has remained in a tight range of 94% to 96% since the IPO. Regarding cash flow, he noted there will be a strong pull-through from EBITDA to free cash flow but did not provide a specific conversion rate target at this time.

Joe Vruwink asked if the subscription growth rate could accelerate faster than GTV growth in FY27 due to new sales approaches for Pro products like MAX and new bundles. He also asked if ServiceTitan has historically been able to proactively flag consumer issues impacting average ticket sizes during HVAC destocking cycles.

Answer

CFO Dave Sherry stated it's too early to call for a change in the gap between subscription and GTV growth rates for FY27, noting that Pro products are a major driver, augmented by fintech utilization. He recalled that average ticket growth accelerated quickly during COVID, indicating consumer influence, but didn't specifically mention proactive flagging during destocking cycles.

Joe Vruwink asked for context on the $1.4 million execution-based upside in Q3, specifically if it stemmed from larger deal sizes or higher conversion rates, and why this magnitude of overperformance isn't fully flowing through to Q4. He also inquired about the 110 customers adopting Banking Advisor, asking if adoption scales down to the smallest customers and if non-adopters might feel left behind, potentially increasing early renewals.

Answer

Sean Desmond, nCino's Chief Executive Officer, attributed the execution to a balanced portfolio across solutions and geographies, mitigating risk and driving platform value. Greg Orenstein, nCino's Chief Financial Officer, noted strong churn management and stated that the flow-through is consistent with their guidance philosophy of managing to achievable expectations. Sean Desmond added that Banking Advisor adoption is seen across all market segments, from top-tier banks to small community banks, providing scalable capabilities like proactive portfolio risk monitoring.

Joe Vruwink from Baird asked for clarification on the $1.4 million execution-based upside in Q3, questioning if it stemmed from larger deal sizes or higher conversion rates, and why this magnitude wasn't fully flowed through to Q4 guidance. He also inquired about the 110 customers adopting Banking Advisor, asking if adoption scales effectively across all customer sizes and if non-adopters might feel left behind, potentially increasing the importance of early renewals.

Answer

CEO Sean Desmond attributed the execution to a laser focus on pipeline conversion across a balanced portfolio of solutions and geographies, emphasizing the platform's value proposition and churn mitigation. CFO Greg Orenstein added that churn is trending down towards historic norms and that the flow-through to Q4 is consistent with their guidance philosophy of managing to achievable expectations. Desmond confirmed that Banking Advisor adoption is seen across all market segments and sizes, from top-tier banks to small community banks, with capabilities like proactive portfolio risk monitoring being scalable and transformative for all.

Joe Vruwink asked about the new pricing model, specifically how the transition is proceeding for large commercial customers and if the model helps widen the scope of customer engagement. He also asked how first-half bookings compared to the internal plan.

Answer

CEO Sean Desmond explained that the new outcome-aligned pricing model facilitates better conversations about efficiency, which resonates well with customers. CFO Greg Orenstein added that about a third of the 21% of ACV on the new model is from mortgage. He also noted that first-half net bookings performance was strong and supports confidence in the full-year ACV guide.

Joe Vruwink questioned whether Autodesk needs to maintain the same level of prudence in framing its fiscal 2027 outlook, given the consistent outperformance in fiscal 2026 and early stages of new growth drivers like consumption and cloud adoption. He also asked about Autodesk's role when large EMC customers establish internal development teams and use data scientists with agents.

Answer

CFO Janesh Moorjani stated that specifics for fiscal 2027 guidance would be discussed in February, but reiterated enthusiasm for Q3 execution, business momentum, and long-term growth potential, while acknowledging go-to-market optimization and macro risks. CEO Andrew Anagnost affirmed that Autodesk's platform will be central to how customers apply their IP with data scientists to workflows, making it easier for them to create value. He emphasized that Autodesk's services and agents will be core, augmenting any internally built agents and capabilities.

Joe Vruwink questioned whether Autodesk needs to maintain the same level of prudence in its fiscal year 2027 outlook, given the current business strength and early stages of consumption and cloud adoption. He also asked about Autodesk's role in large EMC customers' internal development efforts, particularly with data scientists and platform services, amidst the perception that AI might enable them to do more internally.

Answer

CFO Janesh Moorjani stated that specifics for FY27 guidance would be discussed in February, but reiterated enthusiasm for Q3 execution and long-term business momentum, while still considering go-to-market optimization and macro risks. CEO Andrew Anagnost affirmed that Autodesk's platform will be central to these customers' efforts, enabling them to apply their intellectual property with data scientists to workflows, with Autodesk's services and agents augmenting their internal capabilities.

Joe Vruwink of Baird asked about Autodesk's strategy for AI in manufacturing, questioning whether to buy, partner, or build, and inquired about the implied growth rate step-down in the fourth quarter guidance.

Answer

President and CEO Andrew Anagnost explained the AI strategy is to build a new IP moat around custom foundation models, which will be available to both Autodesk and its partners, while also partnering with promising startups. EVP & CFO Janesh Moorjani stated that the Q4 growth outlook is simply a function of maintaining a prudent guidance posture for the second half of the year.

Joe Vruwink inquired about the potential offsets to CRM attrition, such as Service Center, marketing automation, and Veeva AI, and the initial customer reception and feedback regarding Veeva AI.

Answer

Paul Shawah (EVP Strategy) and Peter Gassner (CEO) highlighted the significant upsell potential with retained Vault CRM customers through new products and AI. Peter noted that customers seek practical AI solutions for rapid value, emphasizing Veeva's industry-specific approach and integrated business consulting.

Joe Vruwink inquired about how potential CRM attrition, commercial subscription revenue raises, and opportunities to add new products like Service Center and Veeva AI to retained Vault CRM customers would net out over the next five years. He also asked about customer reception to Veeva AI and any areas for improvement.

Answer

Paul Shawah (EVP Strategy) and Peter Gassner (CEO) highlighted the potential to sell new products and innovations to retained customers and win back others, noting Veeva's strong win rate in the smaller market and that CRM is no longer the largest part of Veeva. Peter Gassner added that customers seek practical, rapid-value AI solutions for industry-specific automation, with rampant alignment on direction and a desire for faster, more robust delivery.

Joe Vruwink from Baird asked about the evolution and elevated stature of Quality Cloud, its potential role in labs and manufacturing, and its impact on the five-year plan. He also questioned the monetization strategy and strategic importance of Veeva AI.

Answer

CEO Peter Gassner confirmed that Quality Cloud has an elevated focus, particularly in the LIMS area, but its trajectory is in line with the existing $6 billion five-year plan. Regarding AI, he described it as a transformative new layer of 'agents' on the Vault platform. While he expects it to create billions in customer value, he noted that material revenue contribution is not anticipated for fiscal '26 or '27.

Joe Vruwink of Baird inquired about the key drivers for the 200 customers migrating to Vault CRM, asking if new features and the AI strategy were influential. He also asked about the potential impact of macro uncertainty on discretionary revenue streams like services and Crossix.

Answer

EVP, Strategy, Paul Shawah confirmed that Vault CRM adoption is strong, with about 200 customers expected to be live in a year, driven by its superiority to the old CRM and new innovations. He noted that non-adopters sometimes prefer a more custom product. CEO Peter Gassner addressed the macro environment, stating that while uncertain, Veeva has not yet seen a material impact on results or pipeline, and noted that a high-ROI product like Crossix may not be significantly affected.

Joe Vruwink (Baird) questioned the unusual strength in large-scale deal activity during Q3, typically a Q4 phenomenon, and sought insight into the Q4 pipeline. He also asked if the historical relationship between CRPO growth and future revenue potential remains applicable for fiscal 2026.

Answer

Matt Puljiz, SVP of Finance, acknowledged the atypical Q3 large deal performance, possibly due to a new operating model, and described a healthy, broad Q4 pipeline. Tooey Courtemanche, Founder, CEO, and President, emphasized the broad stakeholder success. Matt confirmed the CRPO-revenue relationship still holds but deferred formal 2026 guidance until the new CEO is onboarded.

Joe Vruwink questioned the seasonality of large-scale deals, noting strong Q2/Q3 activity, and asked if CRPO growth could still serve as a reliable indicator for next year's revenue potential.

Answer

Matt Puljiz, Senior Vice President of Finance, Procore Technologies, acknowledged that large deals typically occur in Q4 but noted that the current operating model might be influencing the Q2/Q3 trend, describing the Q4 pipeline as healthy and broad. Tooey Courtemanche, Founder, CEO, and President, Procore Technologies, added that success was driven by a broad set of stakeholders. Matt Puljiz confirmed that the relationship between CRPO growth and future revenue potential would still exist but deferred specific 2026 guidance until the new CEO, Ajay Gopal, has onboarded, with formal guidance expected in February.

Joe Vruwink followed up on the Rule of 40, questioning if the margin-led improvement is a continuation of a trend and what the outlook for revenue growth is. He also asked if AI is compelling customers to increase their volume on the platform or attracting more collaborators.

Answer

CFO Howard Fu confirmed that profitability will drive Rule of 40 improvement next year, cautioning against expecting revenue acceleration due to the macro environment. CEO Craig Courtemanche explained that AI enhances Procore's value and accelerates the existing trend of collaborators joining the platform to own their project data.

Joe Vruwink noted the accelerated bookings in Q3 and asked management to frame expectations for fiscal year 2026, given the current visibility and positive setup for the company.

Answer

President and CEO Anirudh Devgan stated that all five lines of business are performing very well, with double-digit growth expected across all in the current year, and the company is well-positioned across products, geographies, and customer alignment. SVP and CFO John Wall confirmed that while FY2026 guidance isn't provided yet, record backlog and broad-based momentum position Cadence well for next year, aiming for double-digit top-line growth and continued operating leverage.

Joe Vruwink noted the recurring theme of 'acceleration' and strong Q3 bookings, asking for early insights into expectations for 2026 given the current visibility and positive setup.

Answer

President and CEO Anirudh Devgan stated that all five lines of business are performing very well, with double-digit growth expected across all in 2025, and Cadence is well-positioned with leading companies. SVP and CFO John Wall confirmed that while 2026 guidance would be provided later, exiting 2025 with record backlog and broad momentum positions Cadence well, with a disciplined framework aiming for double-digit top-line growth and operating leverage.

Joe Vruwink of Baird asked about the impact of 'physical AI' on Cadence's recent booking strength and whether it's altering customer spending patterns.

Answer

President & CEO Anirudh Devgan explained that while AI infrastructure is huge, 'physical AI' (e.g., autonomous systems, robotics) could be an even larger, long-term opportunity. He noted that this trend drives demand for both specialized, power-efficient edge silicon and the data center infrastructure needed to train these new models, benefiting Cadence's broad portfolio. Devgan emphasized that this market is still in its early stages.

Joe Vruwink from Baird asked if the strategy to stem Life Sciences down-sells is tied to a higher-touch service model and questioned the drivers behind the prudent second-half revenue outlook, which implies a sequential decline.

Answer

CEO Kevin Coop confirmed that Life Sciences clients often need tech-enabled services and data science assistance, making integration and a 'thought partner' approach key. CFO Casey Heller clarified the H2 guidance, noting the midpoint for Q3 implies a subscription revenue decline consistent with Q2, while the upper end implies stabilization, citing continued upsell pressures in Life Sciences.

Joe Vruwink from Baird asked if the strategy to reduce down-sells in Life Sciences is linked to a higher-touch delivery model and whether the second-half outlook implies weaker new business conversion.

Answer

CEO Kevin Coop confirmed that the strategy involves a higher-touch, tech-enabled service model for Life Sciences clients, including data science assistance and deep workflow integrations to become a more valuable analytics partner. CFO Casey Heller clarified that the prudent second-half guidance reflects some upsell pressure in Life Sciences but does not assume a slowdown in new logo acquisition.

Joe Vruwink of Baird asked for clarification on whether the multi-billion dollar addressable market for New Approach Methodologies (NAMs) is incremental to the existing biosimulation TAM and sought Certara's interpretation of customer preferences between PBPK and QSP for NAMs.

Answer

CFO John Gallagher confirmed the NAMs opportunity is an additional market. He also noted that QSP is a high-growth area and a key beneficiary of the NAMs trend. CEO William Feehery added that PBPK and QSP are often closely linked, and since QSP is a newer branch of model-informed drug development, the survey results showing lower QSP adoption were not concerning.

Joe Vruwink from Baird asked about Bentley's strategy for the 'long tail' of engineers with lower software spend, questioning if the company has the right product set and go-to-market model to effectively capture this market segment.

Answer

CEO Nicholas Cumins affirmed that Bentley has a comprehensive product range, with MicroStation serving as the key entry point for engineers, particularly in the SMB segment. He highlighted this strategy's success by pointing to the consistent addition of over 600 new SMB logos for the fourteenth consecutive quarter, which often start with MicroStation before upselling to more specialized applications.

Questioned the reported slowdown in higher education deal closings, asking for the reasons behind it, whether RFP activity remains high, and the potential financial implications for 2024.

Answer

The slowdown is a matter of pace, not activity, as RFP levels are at a six-year high. Customers are temporarily pausing projects to re-evaluate their strategies due to macro pressures like declining enrollment and budget challenges. The company is well-positioned for when these deals resume but is not providing 2024 guidance or specific financial implications at this time.