Jonathan Ho

Jonathan Ho inquired about Qualys's Q-Flex offerings, specifically how they reduce friction and encourage broader platform adoption, and also asked about customer engagement with AI, the uplift opportunity from agentic AI products, and their potential impact on net retention.

Answer

Sumedh Thakar (President and CEO, Qualys) explained that Q-Flex allows customers to consolidate capabilities on a single platform at their own pace, leveraging different Qualys features as threats evolve, which has received positive feedback. Regarding AI, Thakar highlighted Qualys's agentic AI marketplace, which augments security teams with specialized agents like Agent Sarah (patches) and Agent Val (exploitation/remediation), differentiating Qualys from other solutions by enabling autonomous decision-making and rapid remediation. He sees agentic AI as a catalyst for cross-selling from VMDR to ETM and for detecting vulnerabilities in AI workloads.

Jonathan Ho asked about the Q-Flex offerings and their potential to remove friction and encourage broader platform adoption. He also inquired about customer progress in their AI journey, the uplift opportunity from Qualys's agentic AI products, and the potential impact on net retention.

Answer

Sumedh Thakar, President and CEO of Qualys, explained that Q-Flex allows customers to consolidate capabilities on a single platform at their own pace, leveraging different Qualys features as threats evolve. He highlighted positive beta feedback on the flexibility. Regarding AI, Mr. Thakar emphasized Qualys's agentic AI marketplace, which augments security teams with specialized agents like Agent Sarah for patches and Agent Val for exploitation remediation, differentiating Qualys from solutions that only provide scores. He believes these capabilities will drive cross-sell from VMDR to ETM and increase market share.

Jonathan Ho of William Blair & Company inquired about the current macroeconomic environment's impact on business, the conservatism in the raised guidance, and the effectiveness of the Managed Risk Operation Center (mROC) messaging with partners.

Answer

CEO Sumedh Thakar stated the macro environment remains challenging with continued deal scrutiny, and guidance assumes no improvement. CFO Joo Mi Kim added that the net dollar expansion rate improved to 104%, suggesting the selling environment is not worsening. Regarding mROC, Thakar explained that partners are excited to offer a proactive risk management service that differentiates them from the saturated MDR market, enabling significant services revenue.

Jonathan Ho of William Blair & Company inquired about the impact of the current macroeconomic environment on customer spending and the rationale for tightening the full-year revenue guidance. He also asked for details on the customer journey and financial model for Qualys' new Risk Operations Center (ROC) solution.

Answer

CEO Sumedh Thakar explained that while cybersecurity remains a priority, increased spending scrutiny is leading to longer sales cycles, a factor prudently considered in the guidance. Thakar described the ROC journey as a way for customers to consolidate risk signals from multiple tools (including competitors'), quantify business risk in financial terms, and receive prioritized remediation plans, ultimately creating cost savings and justifying the additional budget for the ROC.

Jonathan Ho of William Blair & Company asked about the level and focus of investments in 2025, and inquired about the strategy for bundling TruRisk and TotalCloud, including potential revenue uplift and the balance between adding products versus assets.

Answer

CEO Sumedh Thakar stated that 2025 investment will focus on go-to-market initiatives, particularly supporting the partner ecosystem and the federal business, rather than large increases in engineering. He explained that the Enterprise TruRisk Management (ETM) platform naturally encourages bundling by integrating Qualys modules seamlessly. The company is gathering customer feedback to inform a new packaging strategy later in the year that will simplify adoption and incentivize platform consolidation.

Jonathan Ho inquired about the recent changes in product marketing, their potential future impact, and the drivers behind the strength in the net retention rate.

Answer

President and CEO Sumedh Thakar explained that the product marketing focus has shifted to aligning all modules with a message of business risk and quantification, which is resonating well with customers. CFO Joo Mi Kim noted the outperformance in upsells drove the net retention rate to 103%, but guidance for Q4 assumes no material improvement from this level, despite long-term optimism.

Jonathan Ho followed up on agentic AI, noting interest in both visibility and governance, and asked about the role of CIEM and CNAPP products in AI governance and early customer investment trends.

Answer

Co-CEO Steve Vintz stated that governance is crucial across all domains, including AI applications. He explained that CNAPP covers broad cloud risks, configurations, identities, and workloads, extending traditional VM. The platform's role is to help customers discover assets across multi-domains, correlate data for insights, and provide transparency and governance to enforce AI and broader security policies for proper technology use and deployment.

Jonathan Ho inquired about the pricing uplift observed with broader Tenable One adoption and how asset and coverage rates are increasing over time. He also asked about the role of CIM and CNAPP products in AI governance, its importance, and early customer investment trends in this area, particularly concerning Agentic AI.

Answer

CFO Matt Brown explained that customers transitioning from standalone VM to Tenable One can experience up to an 80% uplift, with even VM-only platform users seeing increased capabilities and uplift. He noted that this strategy attracts customers who churn less, expand more, and engage in larger, more strategic deals. Co-CEO Steve Vintz stated that governance is critical across all domains, including AI, and that CNAPP covers broad cloud risks and extends traditional VM. He emphasized Tenable's role in helping customers discover assets, correlate data for insights, and enforce AI security policies through transparency and governance.

Jonathan Ho asked about the status of the CEO search, including the timeline and the criteria the board is considering for the role.

Answer

Co-CEO and CFO Stephen Vintz responded that the Board is conducting a search with no designated timeline, evaluating both internal and external candidates. He noted the Board has expressed complete confidence in him and Mark Thurmond to lead in the interim and that the existing management team was heavily involved in shaping the company's strategy and vision.

Jonathan Ho of William Blair & Company requested more detail on the reported strength in OT and hybrid IT/OT environments, asking about specific opportunities and the drivers behind the resurgence in OT security.

Answer

Co-CEO Mark Thurmond reported a strong quarter for OT, with a good Q3 pipeline driven by verticals like data centers, manufacturing, and entertainment. He explained that the key driver is IT/OT convergence, where customers' initial OT security needs often lead to broader platform adoption of Tenable One, a competitive advantage over pure-play OT vendors.

Jonathan Ho of William Blair asked how Tenable One affects ASPs and whether benefits are realized upfront, and also inquired about the competitive environment for VM.

Answer

CEO Amit Yoran explained Tenable One has an initial 20-25% price-per-asset premium, with further uplift coming from expanded asset coverage over time, leading to a 70% higher realized ASP. He also described the VM competitive environment as 'exceptionally stable' with strong win rates.

Jonathan Ho from William Blair inquired about additional color on the visibility and progress of Golden Dome and international orders, as well as the status of cost savings and facilities consolidation initiatives and remaining incremental margin opportunities.

Answer

Chairman and CEO Bill Ballhaus highlighted multiple growth vectors, including program ramps, larger U.S. defense budgets, commercial technology mandates, Golden Dome, and international market growth. He noted numerous progressing conversations for Golden Dome and international opportunities, which could lead to upside bookings. EVP and CFO Dave Farnsworth stated that significant OpEx savings have already been recognized from streamlining efforts, with ongoing initiatives for automation and facility optimization, expecting continued positive operating leverage as the business grows without meaningful OpEx increases.

Jonathan Ho inquired about updates regarding Golden Dome and international order visibility, and the progress and remaining incremental margin opportunities from cost savings and facilities consolidation initiatives.

Answer

Chairman and CEO Bill Ballhaus discussed ongoing conversations for Golden Dome and international opportunities, noting their potential to exceed target profiles if materialized. EVP and CFO Dave Farnsworth highlighted significant OpEx savings already realized and ongoing efficiency initiatives, expecting continued operating leverage.

Jonathan Ho inquired about the rationale for not providing specific FY26 guidance despite a strong backlog and asked about the pipeline progression for initiatives like Golden Dome.

Answer

CEO William Ballhaus explained that the outlook does not yet account for potential delivery accelerations or new bookings from positive market tailwinds like Golden Dome, which are still being quantified. He noted that near-term volume opportunities are more likely to come from increased quantities on existing programs rather than entirely new design wins.

Garrett Burkam, on behalf of Jonathan Ho from William Blair, asked for an explanation of the quarterly book-to-bill ratio dipping below 1.0 and questioned if there were any notable macroeconomic or federal budget-related disruptions impacting the business.

Answer

CEO Will Ballhaus advised not to focus on a single quarter's book-to-bill, pointing to the healthier trailing 12-month ratio of 1.1. He noted that booking timing can fluctuate and that some awards slipped from Q3 into a very strong start for Q4. Regarding the macro environment, he sees no major disruptions and expressed a positive bias, citing a growing defense budget and a favorable shift towards acquiring new technologies.

Jonathan Ho sought additional details on the $30 million in pull-forward revenue, asking if it was concentrated in specific programs and whether it was driven by customer or government directives.

Answer

CEO Bill Ballhaus attributed the revenue pull-forward to the company's relentless focus on customer deliveries. CFO Dave Farnsworth added that the activity was not concentrated in a single contract or customer but was spread across multiple products and customers. He noted that improved operational capacity enabled the company to accelerate deliveries from Q3 into Q2, getting products to customers earlier than initially expected.

Jonathan Ho asked for an assessment of the current state of AI security adoption and where customers are on the maturity curve for integrating new AI solutions, using a 'what inning are we in' analogy.

Answer

Tomer Weingarten, CEO of SentinelOne, highlighted Prompt Security as central to AI security, noting incredible customer and partner response due to its ability to address the urgent need for real-time visibility, governance, and control for generative AI and agentic tools. He reported healthy early traction, positioning Prompt as both a cross-sell opportunity and an entry point for new customers.

Jonathan Ho of William Blair asked about the key success drivers for Singularity Cloud, particularly the value proposition of runtime security and the company's fundamental architectural advantages.

Answer

CEO Tomer Weingarten explained that SentinelOne's cloud security strategy began with runtime protection, which remains a core strength and area of traction. He noted the platform's value is compounded because cloud security is integrated with the broader platform, giving customers access to EDR visibility, the data lake, and Purple AI analytics for their cloud workloads.

Jonathan Ho asked for color on SentinelOne's exposure to the U.S. federal government and which platform solutions are seeing the best traction and driving growth.

Answer

Tomer Weingarten (CEO) acknowledged uncertainty in the federal sector but noted that SentinelOne's pipeline there has expanded. He emphasized that their solutions can create cost synergies for agencies, a key advantage. He identified AI SIEM and Purple AI as the two main growth drivers, highlighting a record cloud security deal in Q4 as another area of strength.

Jonathan Ho requested an update on the sales realignment efforts and the impact of product suites on the go-to-market strategy. He also asked about the expected pace for net retention, which has been around 106%, and the mechanics for its recovery.

Answer

President and COO Eric Kelleher stated that go-to-market specialization has been very effective, leading to specialized demand generation, focused engagement with distinct buyer personas (CIO/CISO, developers), and significant product innovation. He noted that AE attrition is near a multi-year low, and tenure is near a multi-year high, indicating field engagement and success. CFO Brett Tighe added that product suites help reps delve into product details and sell directly. Brett Tighe confirmed that gross retention remains healthy and the 106% net retention rate is within the expected range, likely tracking similarly for Q4. He mentioned that future NRR improvement would focus on upsells, new product introductions, and Okta securing AI, balancing new business (a headwind) with upsells (a tailwind).

Jonathan Ho from William Blair & Company asked for an update on the progress of the go-to-market specialization, including key learnings and the impact observed on the business so far.

Answer

CEO Todd McKinnon reported a solid start with strong performance from the Auth0-focused team and a healthy pipeline build. President & COO Eric Kelleher added that key learnings confirm specialization works, citing past successes in Public Sector and US Commercial teams. He noted that while it takes time, the focused approach accelerates sales enablement and improves the customer experience.

Jonathan Ho asked for an explanation of the opportunity around agentic AI, how it increases the number of identities, and how Okta specifically benefits.

Answer

CEO Todd McKinnon described agentic AI as "machine identity on steroids," increasing the number of non-human logins by orders of magnitude. He explained that Okta benefits in three key ways through its 'Auth for GenAI' offering: 1) providing secure authentication for agents to prevent hard-coded credentials, 2) enabling Fine Grained Authorization (FGA) to enforce least-privilege access for agents interacting with APIs, and 3) supporting step-up user authentication for critical agent actions. He noted a waitlist of over 200 companies for the product.

Jonathan Ho requested more detail on the go-to-market specialization initiative and the reasons for implementing it now.

Answer

CEO Todd McKinnon explained that Okta is moving toward greater specialization to accelerate growth, believing the benefits will outweigh the costs. The plan involves creating dedicated sales teams for Auth0 (targeting developers) and the broader Okta suite (Access Management, Governance, etc.). CFO Brett Tighe added that the primary goal is to enhance account executive productivity, building on recent efficiency gains.

Jonathan Ho asked for clarification on the drivers of CCAs growth, distinguishing between new contracts coming online and adoption within existing contracts. He also questioned the competitive landscape and pricing environment for network intelligence offerings, and the sustainability of their growth. Finally, he asked about growth drivers in larger CCAs contracts and the impact of ad campaigns.

Answer

CEO Eyal Harari stated that the main CCAs growth comes from contracts won last year that are now onboarding and launching services, with new projects supporting longer-term growth. For network intelligence, Mr. Harari described the competitive landscape as 'easier' despite tight telco CapEx, highlighting the unique Terra 3 technology for competitive pricing and expressing confidence in continued growth. He outlined four CCAs growth drivers: new customers, offering additional services (mobile/fixed, business/consumer), marketing support for partners' go-to-market efforts (with services peaking after 2-3 years and strong attach rates), and upsell/cross-sell of new innovations like OPNET.

Jonathan Ho asked for a breakdown of CCAS growth drivers, distinguishing between new contracts coming online and adoption within existing contracts. He also questioned the competitive landscape and pricing environment for network intelligence offerings, and the sustainability of their growth. Finally, Mr. Ho inquired about the growth drivers in larger CCAS contracts, including the impact and learnings from ad campaigns.

Answer

CEO Eyal Harari clarified that the main CCAS growth stemmed from contracts won in the last two quarters that have onboarded and launched, with existing strategic accounts continuing to add subscriptions. For network intelligence, Mr. Harari noted an 'easier' competitive landscape and unique Terra 3 technology providing a competitive edge, expressing confidence in continued growth despite tight telco CapEx. He outlined four CCAS growth drivers: new customers, offering additional services (e.g., fixed security, business customers), marketing support for partners (with services peaking after 2-3 years and strong double-digit attach rates), and upsell/cross-sell of new innovations like OPNET.

Jonathan Ho of William Blair & Company asked for more details on the Verizon MyBiz opportunity, its expected ramp-up over time, and clarification on the large European telecom deal, specifically whether it was a CCaaS or networking-related contract.

Answer

CEO Eyal Harari explained that the Verizon MyBiz plan includes Allot's cybersecurity as a default add-on for SMB customers, with Allot receiving a fee for every new subscriber. He anticipates a 2-3 year ramp to peak penetration based on past experiences. Harari clarified that the large European deal is a network intelligence (Smart) contract, not CCaaS, involving the new SG TerraThree platform, with most revenue expected in 2026 and 2027.

Jonathan Ho asked about the drivers behind the strength in the U.S. market during Q3 2025, specifically regarding win rates or utilization. He also sought clarification on the timeframe for public transit ballot measures to translate into contracting and RFP opportunities.

Answer

Clara Fain, CFO, characterized Q3 2025 as 'business as usual' with strong demand across all metrics and solutions, consistent with the market's historical cadence and large opportunity. Daniel Ramot, Co-Founder and CEO, explained that ballot measures are a very long-term process, taking months to years for funding to become available and often appropriated over many years. Via is increasingly involved in supporting these measures, thinking 1, 2, 5, or even 10 years ahead for material business impact.

Jonathan Ho asked about the drivers behind the strong performance in the U.S. market during the quarter, specifically what stood out in terms of win rates or utilization. He also sought clarification on the typical timeframe for public transit ballot measures to translate into contracting and RFP opportunities.

Answer

Clara Fain, CFO, characterized Q3's U.S. strength as 'business as usual,' reflecting strong demand across all metrics and solutions, consistent with historical market cadence and the large, durable growth opportunity. Daniel Ramot, Co-Founder and CEO, explained that ballot measures represent a very long-term process, taking months or even years for funding to become available and translate into procurement, with funding often spanning many years. He noted Via's increasing involvement in supporting and initiating these measures, with a long-term strategic outlook.

Jonathan Ho asked about customer interest in using AI in their everyday workflows and Trimble's data moats in the space. He also inquired about the composition of the 15% ARR growth, specifically between new customer acquisition, net expansion, and pricing. Additionally, Mr. Ho asked about the federal government business, the opportunity and timing for FedRAMP certification, and whether the shutdown would impact it, as well as the impact of recent price increases in the SketchUp business and its role in lead generation.

Answer

President and CEO Rob Painter highlighted Trimble's unique data corpus from trillions of dollars in construction, billions in freight, millions of software users, and hundreds of thousands of physical instruments, enabling a progression from optimizing tasks to systems. He noted varying customer readiness for AI, with increasing curiosity and progressive customers already using AI for natural language design, auto-invoicing, and autonomous procurement. CFO Phil Sawarynski stated that the 15% ARR growth composition remained consistent, with approximately one-third from new logos and two-thirds from existing customers within AECO. Mr. Painter explained that FedRAMP certification was primarily for a stronger security posture for all customers, not just federal, with no planned revenue impact in 2026. For SketchUp, he mentioned optimizing monthly and annual pricing to encourage annual licenses and highlighted its role in cross-sell plays, particularly with reality capture.

Asked about the benefits and customer adoption of Trimble's AI capabilities, and the source of traction for the Trimble Construction One (TC1) platform, specifically whether it's from new or existing customers.

Answer

The CEO explained that Trimble's unique and vast dataset (from construction, freight, and users) is key to its AI strategy, which is enabled by their cloud-focused 'Connect and Scale' initiative. For TC1, about two-thirds of AECO bookings come from existing customers expanding their usage, with strong adoption in packages combining civil estimating, project management, and ERP.

Jonathan Ho inquired about how AI could competitively benefit Trimble by prompting customers to reevaluate solutions. He also asked for more details on the 'machine control as a service' offering and its role in acquiring new customers.

Answer

CEO Robert Painter explained that Trimble's unique scale of data across industry lifecycles provides a competitive advantage in an AI-driven world. Regarding 'machine control as a service,' he highlighted that over 50% of new contracts in the quarter were with new logos, demonstrating that the subscription model is expanding the addressable market and aiding in competitive swap-outs.

Jonathan Ho of William Blair & Company, L.L.C. asked about Trimble's competitive advantage from AI and for more details on the "machine control as a service" offering, including its role in customer acquisition.

Answer

Executive Robert Painter explained that Trimble's competitive edge in AI stems from its unique scale of data across the construction and transportation lifecycles. For the "machine control as a service" offering, he highlighted that over 50% of Q1 customers were new logos, demonstrating that the subscription model is successfully expanding the addressable market and aiding in competitive swap-outs.

Asked about the competitive advantage derived from AI and for more details on the 'machine control as a service' offering, including its success with new logos and potential for converting existing customers.

Answer

The executive explained that Trimble's unique scale of data provides a competitive advantage in AI. On 'machine control as a service', he noted that over 50% of customers in the quarter were new logos, demonstrating it expands the addressable market. The model also helps in competitive swap-outs by making it more affordable for customers to switch to Trimble, and the subscription base allows for future land-and-expand plays.

Jonathan Ho of William Blair & Company questioned the uniqueness of Trimble's data for its AI strategy and asked for clarification on the size and impact of its U.S. federal government business.

Answer

CEO Robert Painter highlighted that Trimble's unique data advantage stems from connecting the physical and digital worlds across the entire construction lifecycle, creating a rich dataset for developing unique workflows. He also explained that the U.S. federal business, primarily within Field Systems, is lumpy and is projected to be down in 2025, which partially masks underlying growth in the segment.

Jonathan Ho of William Blair asked about the market for protecting agentic AI, noting that spending is fragmented. He inquired about what customers are buying today and which categories related to agentic AI security CrowdStrike is most excited about.

Answer

Founder & CEO George Kurtz acknowledged that customers are in the early stages of securely implementing AI. He asserted that more AI necessitates more security. He outlined CrowdStrike's role in securing the entire AI lifecycle, from model creation to deployment and agent protection. Kurtz positioned an AI agent as a "superhuman," stating that CrowdStrike's leadership in protecting users and workloads perfectly positions the company to protect these AI agents in the future, which is a big part of their strategy.

Jonathan Ho asked about the key drivers behind the strong demand for API and micro-segmentation security and questioned why the overall security revenue growth isn't higher.

Answer

CEO Tom Leighton explained that API security and micro-segmentation are greenfield markets where customers are now recognizing urgent needs, driven by factors like ransomware threats. He noted that while these newer solutions are growing over 30%, the overall security segment's growth is moderated by its large base of more mature products, like WAF and DDoS protection, which are growing at a slower rate.

Jonathan Ho asked for more details on Akamai's new AI firewall, its potential role with agentic AI, and whether the company is facing diversification pressure from international customers concerned about relying on U.S.-based services.

Answer

CEO Dr. Tom Leighton detailed that the AI firewall protects against attacks that trick AI agents, poison data, or cause leaks, noting it's a new and growing attack surface. Regarding geopolitical concerns, he acknowledged the topic has come up but stated that for critical security services, there are few viable alternatives to Akamai, and the company is working to reassure customers of its long-term commitment.

Jonathan Ho asked about the potential impact of hardware tariffs on Akamai's business, whether the company could pass on higher costs, and the exposure given the need for long-term investment in compute.

Answer

CFO Ed McGowan acknowledged the uncertainty around tariffs but noted Akamai is mitigating risk by pulling forward $10-15 million in CapEx and has the ability to move supply chains. He stated that passing on costs to customers is being explored as part of a broader pricing strategy review with their consulting firm, and they would have to bake in any material cost increases into future pricing.

Jonathan Ho from William Blair asked about the significance of the recent management changes, questioning if this marks a 'new chapter' for Fastly and what the long-term opportunity for accelerating growth looks like. He also followed up on the pricing environment, seeking reasons for the company's optimism that favorable conditions will persist.

Answer

CEO Kip Compton agreed it is a 'new chapter,' focusing on building on existing momentum, increasing execution speed, and accelerating the path to profitability. Regarding pricing, Compton attributed the positive trend to increased discipline from the go-to-market team in negotiating discounts and commitments. CFO Ron Kisling added that broader macro factors, such as industry consolidation and post-2024 market stability, are also contributing to the favorable pricing environment.

Jonathan Ho asked for details on the 64% growth in the compute and observability segment, seeking to understand the key product drivers and customer demand. He also inquired about the macro outlook and the conservatism baked into guidance.

Answer

CEO Todd Nightingale clarified that compute products were the main growth driver, fueled by demand from verticals like travel for dynamic, real-time user experiences and innovative storage use cases. On the macro front, he stated that while no change in buyer behavior has been observed, the company maintains a conservative guidance as a hedge against potential uncertainty.

An analyst on behalf of Jonathan Ho asked for more color on where the security business is finding success versus where it is slower, particularly regarding customer types or specific products.

Answer

CEO Todd Nightingale highlighted success with their WAF product, citing its efficacy and ability to run in full blocking mode as a key advantage. He noted the unification of the security portfolio onto the Fastly platform is driving confidence. The biggest upside is seen outside of media, in verticals like e-commerce, fintech, and travel, as well as the large untapped opportunity to cross-sell into the existing delivery customer base.

Jonathan Ho from William Blair requested insight into the second-half bookings forecast and asked about the most common upgrade path for customers adopting premium software offerings.

Answer

President Josh Isner expressed high confidence in the H2 bookings pipeline, driven by strong sales execution. He explained that customers typically upgrade from basic plans to premium bundles like the Officer Safety Plan (OSP) over time. COO & CFO Brittany Bagley added that continuous product innovation, including the new AI era plan, naturally fuels this upgrade cycle.

Jonathan Ho asked whether the rapid adoption rate of the TASER 10 creates a risk of pulling forward future demand and hitting a growth 'wall' in coming years.

Answer

President Joshua Isner stated he does not see a significant risk of this occurring. He explained that TASER 10 is accelerating the upgrade cycle for customers on much older models (like the X2 and X26P), not just those on a predictable 5-year cycle. He also highlighted the extensive greenfield opportunity that remains in international markets and other verticals, which provides a long runway for continued growth.

Jonathan Ho inquired about the drivers behind the strong international bookings and the rationale for expanding the international Total Addressable Market (TAM). He also posed a strategic question about the potential applications of agentic AI.

Answer

CFO Brittany Bagley stated the TAM expansion reflects a wider product portfolio now available internationally. President Joshua Isner credited strong bookings to improved team execution. CEO Patrick Smith and CPO/CTO Jeffrey Kunins explained Axon's approach to agentic AI is to apply it to practical, high-value customer workflows, like report writing, while ensuring human oversight and managing risk.

Jonathan Ho asked for details on the strength in international bookings, the rationale for expanding the international Total Addressable Market (TAM), and a high-level question for the CEO on the potential applications of agentic AI.

Answer

Brittany Bagley, CFO, explained the TAM expansion reflects a broader product portfolio, including Fusus and AI, now available to international markets. Joshua Isner, President, credited strong international bookings to improved team execution. Patrick Smith, CEO, envisioned agentic AI solving complex customer problems by leveraging Axon's data and trust, starting with high-value, lower-risk applications.

Jonathan Ho asked about the broader opportunity for drones as a first responder (DFR), including monetization and adoption catalysts, and questioned the sustainability of the TASER segment's high growth rate.

Answer

CEO Patrick Smith described drones as a "huge opportunity," with the Dedrone acquisition being a key enabler for airspace awareness. He also highlighted a strategic partnership with Skydio. Regarding TASER, both Smith and EVP Joshua Isner expressed strong confidence in sustained growth, citing a massive international opportunity and being only in "year two of five" of the T10 upgrade cycle. CFO Brittany Bagley tempered expectations, noting Q3's growth was exceptionally strong due to increased capacity.

Jonathan Ho from William Blair asked for more detail on the drivers behind the strong transaction-based revenue this quarter and the factors that might lead to more normalized growth going forward.

Answer

EVP & CFO Brian Miller attributed the growth to success in bundling payments with software, growth from third-party payment partners, and new contracts like California parks and Florida SunPass. President & CEO Lynn Moore added that improved onboarding speed and client adoption initiatives also contributed. Normalization would be driven by seasonality and eventually reaching peak penetration of the installed base.

Jonathan Ho from William Blair requested more detail on the impact of third-party transaction fee increases and an update on the status and financial expectations for the Texas.gov contract.

Answer

CFO Brian Miller explained that higher-than-expected rate increases from third-party payment partners boosted transaction revenue. Regarding the Texas contract, he noted strong volumes and a service extension as the state transitions to a new provider. CEO Lynn Moore added the extension could add approximately $3-3.5 million in low-margin revenue in 2025.

Jonathan Ho asked about the historical impact of ARPA funding and whether its wind-down could negatively affect government agency spending confidence going forward.

Answer

CEO H. Moore stated that ARPA funding was never a material driver of business, though it did help accelerate a few deals at the end of the year. He asserted that he does not view the wind-down as a headwind, as the general health of state and local government budgets is the far more significant factor driving demand and his confidence in future sales.

Jonathan Ho asked about the emerging AI opportunity, customer interest levels, and what it could mean for future upsell potential, referencing a recent AI-related project.

Answer

CEO Lynn Moore described a 'deliberative approach' to AI, focusing on both internal efficiencies and external client solutions. While customer curiosity is increasing, AI is not yet a primary deal driver. She noted that solutions with a clear ROI, like the acquired CSI and ARInspect products, are seeing success, and interest is growing, but clients remain somewhat conservative.

Jonathan Ho of William Blair asked about the most relevant go-to-market changes that have been made and the expected timing for these changes to have a more meaningful impact on results.

Answer

CEO Nadav Zafrir identified leadership changes as the most critical, having expanded the C-suite with new presidents, a CMO, and a CRO. He also pointed to a focus on attracting marketing-oriented talent and a cultural shift to be more assertive in communicating the company's value proposition.

Jonathan Ho asked for more detail on the messaging around the 'Hybrid Mesh' architecture and how this concept is resonating with customers to change Check Point's narrative.

Answer

CEO Nadav Zafrir explained that the Hybrid Mesh concept addresses the reality of modern hybrid environments (on-prem, cloud, remote). He stated the platform's value proposition is providing prevention-first security, superior user experience, and cost optimization. He acknowledged the concept is resonating but requires continued investment in marketing to educate the market.

Jonathan Ho asked about the most significant opportunities around Artificial Intelligence and how Check Point plans to use AI as a key differentiator moving forward.

Answer

CEO Nadav Zafrir detailed a three-pronged AI strategy: 1) enhancing infrastructure efficiency with autonomous capabilities, 2) defending against AI-powered threats and securing customer AI usage, and 3) researching future threats. The core goal is to leverage AI to simplify security and protect the expanding attack surface.

Jonathan Ho asked about the recent inflection in the enterprise browser (Talon) and how its integration into the broader platform aids the company's strategy, particularly around the AI opportunity.

Answer

Chief Product Officer Lee Klarich explained that the browser's inflection is driven by its integration into the Palo Alto Networks platform, transforming it from a niche tool into a comprehensive solution for securing all user traffic. Regarding AI, he noted that this integration allows for embedding security controls directly in the browser, which provides customers with better security and an improved user experience when adopting AI applications.

Jonathan Ho asked about the strategic rationale for integrating Cloud Native Application Protection Platform (CNAPP) capabilities into the Cortex platform and how this move could accelerate platform adoption.

Answer

Chief Product Officer Lee Klarich explained that effective real-time cloud security requires the rich context provided by CNAPP and code security. He stated that maintaining a clean cloud environment through better posture management makes it easier for run-time and SOC tools to detect threats. The company believes connecting all aspects of cloud security delivers the best customer outcomes, which is reflected in the new Cortex Cloud offering.

Jonathan Ho asked for an update on the performance and adoption of the Pathfinder solution and inquired about specific programs in the Memorial Day budget that Cellebrite is targeting.

Answer

Interim CEO Thomas Hogan noted that Pathfinder is growing in line with the core business, unlike the hyper-growth of Guardian, but recent product enhancements are expected to improve its trajectory. CRO Marcus Jewell added that the latest release makes Pathfinder more consumable for mass adoption. Regarding the budget, Jewell explained its passage would provide funding stability and that Cellebrite is positioned for 8-9 key programs related to human trafficking, fentanyl, and border safety.

Jonathan Ho of William Blair & Company requested details on the drivers behind the strong net retention rate, specifically the mix of new seat expansion versus upsells, and how customers are utilizing AI in Cellebrite's platform.

Answer

CFO Dana Gerner attributed the strong net retention primarily to expansion within the Insights offering, driven by upgrades and selling more capabilities like unlocks to existing users, rather than just adding seats. CEO Yossi Carmil highlighted that customers value AI for enhancing investigative speed and noted future AI opportunities in media, text, and cryptocurrency analysis.

Jonathan Ho inquired about the key factors required to reaccelerate Annual Recurring Revenue (ARR) growth and what potential upside scenarios could materialize.

Answer

CEO Corey Thomas identified two primary drivers for ARR reacceleration. The first is continued execution in the strong-performing Detection and Response (D&R) business, bolstered by a newly expanded enterprise offering. The second is successfully activating the upgrade cycle for the large vulnerability management installed base to the Exposure Command platform. He stated that the wide guidance range reflects uncertainty around the timing of these drivers.

Jonathan Ho asked for the outlook on net retention given the larger deal sizes and upsell opportunities, and how this compares to the potential contribution from net new customers.

Answer

CEO Corey Thomas stated that the opportunity to upgrade the installed base is better than ever due to new product extensions across both D&R and VM. He noted that significant sales campaigns are underway to drive this motion. He expects to see more robust performance from the expansion business and an increase in net ARR over the course of this year and into next year as a result.

Jonathan Ho of William Blair & Company asked for an update on the MDR space, its potential for wallet share expansion, and whether consolidation in the SIEM market is benefiting the InsightIDR platform.

Answer

CEO Corey Thomas emphasized that their MDR service is high-quality with strong retention, built upon their own product stack. He stated the goal is to monitor 100% of a customer's environment, not just their own data sources. This product-driven approach benefits their SIEM (InsightIDR) customers directly, as the technology developed to make their own MDR analysts productive is delivered to customers, making it a highly effective solution.

Jonathan Ho of William Blair & Company asked for an update on the Model Context Protocol (MCP) and its implications for Cloudflare's role in powering AI agents.

Answer

CEO Matthew Prince explained that Cloudflare is enabling the MCP standard to run on its global network, making it easier for developers to connect AI agents to third-party services. He emphasized that customers trust Cloudflare to solve the massive security challenges involved. The company's strategy is to be a 'universal translator' for all such protocols, positioning itself at the center of AI-to-service interactions, which he believes could be a killer app for Cloudflare Workers.

Jonathan Ho from William Blair inquired about the performance of the security business during the quarter and asked if any specific product categories were standout performers.

Answer

CEO Matthew Prince responded that the primary driver of large deals is customers buying into the entire Cloudflare platform through 'pool of funds' contracts, rather than adopting a single standout product. He emphasized that customers are committing to Cloudflare's unified network architecture vision. He also highlighted the developer platform as an area of significant excitement and accelerating growth, having recently surpassed 3 million developers.

Jonathan Ho asked how data-oriented products like R2 and D1 are performing and if they are contributing to growth in AI workloads.

Answer

CEO Matthew Prince confirmed that R2 is a significant driver, often acting as a gateway for AI customers who use it to move large training datasets. While D1 is less directly tied to AI, he emphasized that the combination of these data primitives with Workers allows customers to build complete, complex applications on the Cloudflare platform, driving broader adoption.

Jonathan Ho requested more detail on the Zilla Security acquisition, its differentiation from legacy IGA, and its alignment with CyberArk's platform strategy.

Answer

CEO Matt Cohen explained that Zilla provides a modern IGA solution for dynamic SaaS and cloud environments, a gap left by legacy tools focused on static on-premise IT. Zilla uses an AI-driven approach to automate entitlement management for complex applications like Salesforce and Workday. He emphasized that it integrates directly into the CyberArk platform, combining entitlement governance with access controls to create a more secure and comprehensive solution.

Jonathan Ho inquired about the opportunity to increase customer awareness of the machine identity problem and their current level of understanding. He also asked for the drivers behind the quarter's strong operating margin outperformance.

Answer

CEO Matt Cohen explained that awareness is being scaled through marketing events, partner enablement, and direct sales conversations, with market factors like Google's 90-day certificate mandate creating urgency. CFO Joshua Siegel attributed the strong margin to the revenue beat, the timing of certain expenses shifting to Q4, and overall operational efficiency.

Jonathan Ho inquired about how CyberArk's platform vision is resonating with customers and whether channel partners are increasingly driving platform-based deals. He also asked if the current high free cash flow margin represents a new normal.

Answer

CEO Matt Cohen affirmed that the platform vision is foundational to their solution-selling motion, resonating well with customers and future-proofing their security investments, which is why nearly half of new logos purchase multiple solutions. CFO Josh Siegel stated that while the full-year guidance is their official forecast, the strong first-half results demonstrate significant leverage in the model, and they anticipate continued free cash flow margin expansion in future years.