Johnathan McCary

Jonathan McCary inquired if Freshworks is observing a 'halo effect' where customers experiencing value from Freddy AI products on one side of the business (CX or EX) are subsequently drawn to cross-sell opportunities on the other side.

Answer

CEO Dennis Woodside confirmed seeing the impact of AI driving greater expansion and retention, evidenced by a net dollar retention rate of 116% for customers using AI paid SKUs, up from 112% in the prior quarter. He stressed that getting customers onto AI is a critical imperative because they see clear value and business cases, enhancing their relationship with Freshworks and leading to positive upside.

Johnathan McCary of Raymond James asked if 'boomerang' customers are becoming a broader trend and inquired about any changes in the competitive landscape or the types of competitors Definitive Healthcare is displacing.

Answer

CEO Kevin Coop stated the competitive environment is largely unchanged, facing integrated software platforms at the high end and point solutions competing on price at the low end. He emphasized that Definitive Healthcare competes on data quality and service, noting that boomerang customers often return after experiencing the lower value of cheaper alternatives.

Johnathan McCary of Raymond James inquired if 'boomerang customers' returning to the platform is becoming a broader trend and asked for an update on the competitive environment.

Answer

CEO Kevin Coop stated that the competitive landscape has not materially changed. He explained that Definitive Healthcare competes with high-end platforms on the basis of its differentiated, higher-quality data and with low-end point solutions on service and value, not price. He confirmed that 'boomerang' customers often return after finding lower-priced alternatives lack the necessary data quality and accuracy.

Johnathan McCary, on for Brian Peterson, asked about the impact of foreign exchange rates on revenue and billings and what FX assumptions are included in the guidance.

Answer

CFO Bill Koefoed explained that the strong dollar in late 2024 created a headwind for 2025 revenue recognition. He noted that the dollar has weakened recently. If current, more favorable rates hold through Q4, it would create a tailwind for revenue recognized in fiscal 2026 from billings made at the end of 2025.

Johnathan McCary of Raymond James inquired about the company's appetite for M&A now that the initial Airbase integration is underway and whether there are new strategic product areas of interest.

Answer

President, CEO & Director Toby Williams stated that the company's M&A strategy remains consistent: to be open to acquisitions that accelerate the product roadmap. He emphasized a high bar for any potential deal, requiring tight integration to ensure an acquired product feels native to the Paylocity platform.

Johnathan McCary from Raymond James asked about the demand generation impact from the Intapp Amplify product event, seeking quantification of pipeline build or customer re-engagement beyond the number of attendees.

Answer

John Hall, Chairman and CEO, described the event as a success with tremendous turnout and enthusiasm for new products, particularly the AI-driven Intapp Assist origination capability and the next-generation Intapp Time. He confirmed a strong pipeline response and noted there was a 'line out the door' for demos, indicating significant client engagement.

Johnathan McCary asked if traction with larger, more complex health systems has increased and if deals over $100,000 are becoming a larger portion of the pipeline.

Answer

CEO Matt Hawkins confirmed strong momentum with both large health systems and ambulatory clients, stating that the pipeline entering 2025 is stronger than it was at the start of 2024. While not providing specific pipeline composition details, he noted that strong client satisfaction scores and a library of case studies are effectively supporting go-to-market efforts across all segments.

Jonathan McCarry, on for Brian Peterson, inquired about the specific functionality of the client portal that will be rolled out to all clients and its monetization roadmap.

Answer

CEO Jeff Tangney confirmed the client portal will be available to all clients early next year. He highlighted that the portal's upsell recommendations, such as Nurse Practitioner (NP) audience extensions, have been a significant growth driver. He also noted a strategic shift to prioritize agency partnerships for near-term growth over a direct-to-SMB self-service model, leveraging a 'land and expand' motion with agencies.