Josh Baer

Josh Baer inquired about Zoom's strategy for balancing the development of new vertical solutions for additional departments (e.g., marketing, sales, HR, contact center) with deepening existing offerings and maintaining its horizontal platform play.

Answer

Eric Yuan (Founder and CEO, Zoom) explained that with the evolution of AI and AI coding tools, Zoom can pursue both strategies simultaneously. He stated that Zoom continues to innovate horizontally with Zoom Workplace and AI Companion features, while also doubling down on vertical and departmental use cases like customer support, Zoom Revenue Accelerator, webinars, and BrightHire, leveraging AI for monetization opportunities.

Josh Baer asked about Zoom's strategy for balancing the development of new products for additional departments and roles against deepening solutions in existing areas, while also maintaining its horizontal play.

Answer

Eric Yuan, Founder and CEO, Zoom, explained that with AI evolution and AI coding tools, Zoom can now pursue both horizontal and vertical strategies. He stated that they continue to innovate horizontally within Zoom Workplace and are doubling down on vertical and departmental use cases like customer support, ZRA, webinar, and BrightHire, leveraging AI to quickly penetrate new markets.

Josh Baer inquired about the sustainability of growth factors across Zoom Phone (mid-teens ARR growth), Customer Experience (high double-digit growth), and Workvivo (rapid growth).

Answer

CFO Michelle Chang outlined Zoom's three priorities: elevating Zoom Workplace with AI, driving new AI products, and scaling AI-first customer experience. She highlighted continued progress against churn, 10 million Zoom Phone seats with mid-teens growth, four times year-over-year AI usage increase, and strong high double-digit revenue growth in Customer Experience with AI preference in deals.

Josh Baer asked for details on the sustainability of growth factors within Zoom's enterprise business, specifically Zoom Phone ARR, customer experience growth, and WorkVivo logo growth.

Answer

Michelle Chang, CFO, outlined three priorities: elevating Zoom Workplace with AI (evidenced by churn reduction, Zoom Phone growth, and AI usage), driving new AI products (horizontal like Salesforce and Oracle, vertical like ZRA and BrightHire), and scaling AI-first customer experience (high double-digit revenue growth and strong AI preference in deals).

Josh Baer sought clarification on whether the incremental 31 megawatts of capacity coming online by the end of 2026 would be sufficient to drive 25%+ revenue growth exiting 2026 and reach 30% growth in 2027. He also asked about Vinay Kumar's top priorities as Chief Product and Technology Officer.

Answer

CFO Matt Steinfort confirmed that the 31 megawatts are expected to drive 25%+ exit growth in Q4 2026 and 30% for the full year 2027, assuming appropriate ramp and utilization. CEO Paddy Srinivasan stated that Vinay Kumar's top priorities include continuing to build out the Inference Cloud with detailed announcements expected at the Deploy conference, and raising the bar on core cloud capabilities, focusing on advanced databases, high-performance storage, and network file systems applicable to both AI-native and cloud-native customers.

Josh Baer with Morgan Stanley sought clarification on the incremental 31 MW capacity, its timeline for coming online, and its sufficiency to drive 25% revenue growth by Q4 2026 and 30% growth in 2027. He also asked about Vinay Kumar's top priorities as Chief Product and Technology Officer.

Answer

CFO Matt Steinfort confirmed that the 31 MW capacity will come online throughout 2026, with the smallest facility ramping revenue in Q2 and the others in H2, enabling 25%+ exit growth in Q4 2026 and 30% growth for the full year 2027. CEO Paddy Srinivasan outlined Vinay Kumar's priorities: continuing to build out the inference cloud with detailed announcements expected at the Deploy conference, and enhancing core cloud capabilities like advanced databases and high-performance storage, applicable to both AI-native and cloud-native customers.

Joshua Baer of Morgan Stanley sought to confirm that AI/ML revenue is excluded from the Net Dollar Retention (NDR) metric and asked how the company is thinking about and incorporating the potential for lumpy, large deals into its guidance.

Answer

CFO Matt Steinfort confirmed that AI revenue is not yet included in NDR, as it will take time for new AI customers to mature into the 13-month cohort, and it will likely be incorporated in future quarters. Regarding large deals, CEO Paddy Srinivasan described it as a new muscle for the company, expecting lumpiness initially. Matt Steinfort added that they will be conservative in forecasting these deals and that revenue is only booked upon utilization, providing some visibility into ramps.

Josh Baer inquired about the supply side of the alternative financing discussion, asking about potential constraints for GPUs and the tightness of the equipment leasing market.

Answer

CEO Padmanabhan Srinivasan stated that DigitalOcean is in a healthy supply position, as its orders are not large enough to face major delays, and the GPU market is less constrained than last year. Regarding financing, he noted 'tremendous interest' from capital providers to fund AI infrastructure. He reiterated that this financing is not needed for the current plan but is an option to accelerate growth faster than forecasted without impacting near-term free cash flow.

Josh Baer of Morgan Stanley inquired about the types of customers and workloads migrating from hyperscalers to DigitalOcean, and also asked for an explanation of the 2024 EBITDA outperformance versus initial guidance and the conservatism in the 2025 forecast.

Answer

CEO Padmanabhan Srinivasan explained that customers migrate from hyperscalers due to complexity and high costs, with DigitalOcean targeting tech-native companies with globally distributed, network-intensive applications. Executive Matt Steinfort added that 2024 EBITDA outperformance stemmed from efficient resource reallocation, avoiding a planned spending surge. He noted the wide 2025 EBITDA guide allows investment flexibility while committing to strong free cash flow.

Josh Baer inquired if the focus on advanced features and attracting hyperscaler workloads signifies a strategic shift upmarket, and asked for the reason behind the sequential drop in net new ARR.

Answer

CEO Paddy Srinivasan clarified the strategy is not a shift away from their core but is about 'following our customers' fleet' by enabling their fast-growing scaler customers to expand their footprint on the platform. CFO Matt Steinfort explained the sequential drop in net new ARR was due to Q2 being an anomaly, where a large amount of new AI capacity came online and met significant pent-up demand, causing a one-time surge.

Josh Baer inquired about the impact of GenAI on direct connects, specifically if it changes the economic equation for airlines and OTAs by lowering coding costs or increasing developer productivity. He also asked for more details on the inflation offset program, including what costs are inflating and what measures are being taken to offset them.

Answer

Garry Wiseman, President of Product and Engineering, highlighted Sabre's advantage in aggregating, normalizing, and displaying content at speed, efficiently handling look-to-book ratios that challenge supplier infrastructure. Kurt Ekert, President and CEO, emphasized that agentic AI will exacerbate these challenges for direct connects, making Sabre's intermediary utility even more crucial. Mike Randolfi, CFO, explained that the inflation offset program targets primarily wage, contractual, and technology cost inflation. The program aims to maintain flat technology and SG&A costs (excluding volume-related hosting) through leveraging geographical locations, third-party expertise, and embedding AI into the workforce. Kurt Ekert added that operational delivery and R&D remain sacrosanct, with plans to increase the number of engineers.

Josh Baer inquired about how GenAI might alter the economic equation for airlines and OTAs regarding direct connections, specifically concerning R&D and infrastructure costs, and sought further details on Sabre's inflation offset program.

Answer

Kurt Ekert, President and CEO, and Garry Wiseman, President of Product and Engineering, explained that Sabre's scalable marketplace and ability to aggregate, normalize, and display content at speed, handling high look-to-book ratios, makes it a superior partner compared to direct connections, a problem exacerbated by agentic AI. Mike Randolfi, CFO, described the inflation offset program as a strategy to keep technology and SG&A costs flat over 2-3 years, primarily addressing wage and contractual inflation through geographical leverage, third-party expertise, and AI integration, while prioritizing operational delivery and R&D.

Joshua Baer questioned the prior guidance's optimism, asking why management didn't foresee the ongoing GDS industry and Sabre-specific mix headwinds, which were already known factors. He sought to understand the change in guidance philosophy and whether the new mid-point scenario represents the base case.

Answer

President, CEO & Director Kurt Ekert acknowledged that while Sabre's growth strategies remain on track, incremental market weakness emerged in June and July, prompting the revised outlook. He explained the new scenario-based guidance reflects the current market view, with the present trading environment aligning with the middle scenario, though he noted potential for upside.

Josh Baer of Morgan Stanley asked about the implied quarterly ramp in air bookings growth needed to meet the full-year target, questioning if it meant growth could reach 20-30% in the second half. He also asked if this market share gain could carry over into 2026.

Answer

CEO Kurt Ekert confirmed the directional math, stating they expect mid-to-high teens growth in Q3 and at or above 20% growth in Q4. CFO Michael Randolfi added that while not providing 2026 guidance, the strong second-half 2025 acceleration provides a 'very strong carryover' into the next year. They clarified the incremental $30 million in bookings is the realized number for 2025, not an annualized figure.

Josh Baer inquired about the implementation process for new agency wins, including the ramp-up timeline and associated risks, and also asked for more detail on the incremental $100 million in cost efficiencies.

Answer

CEO Kurt Ekert explained that Sabre has extensive experience with implementations, which vary by client type (OTA vs. TMC), and expressed high confidence in the 2025 ramp-up projections. CFO Michael Randolfi clarified that the $100 million in savings is the final portion of the tech transformation initiative, with all necessary actions completed by the end of 2024.

Josh Baer asked for more detail on the Q3 revenue miss versus guidance, specifically questioning the dynamics in the IT Solutions segment. He also inquired about the moving pieces in working capital affecting free cash flow and the company's confidence in achieving a strong Q4 to meet its full-year positive free cash flow target.

Answer

CFO Michael Randolfi explained that the revenue variance was an aggregation of minor differences across several streams, not a single discernible trend. He clarified that IT Solutions performance was in line with internal expectations and that the year-over-year decline was due to non-repeating revenue from prior demigrations. Regarding free cash flow, Randolfi expressed high confidence in the Q4 forecast, citing strong seasonality and noting that year-over-year comparisons are impacted by a large one-time working capital benefit from 2023 that is now being lapped.

Josh Baer inquired about the upcoming drive-through product rollout, referencing the past acquisition of Delphi, and whether this opens up a new market segment. He also asked about other U.S. market segments not currently addressed due to product limitations but are on the roadmap.

Answer

CEO Aman Narang clarified that Toast's enterprise focus has historically been on non-drive-through segments like casual dining. The planned drive-through product launch this year will significantly open up that market, addressing the complexities of multi-lane operations. For other segments, he mentioned product improvements for non-English speaking SMB operators, bars, pizzerias, and membership clubs. In enterprise, opportunities exist in sports and entertainment, and golf, with the product team prioritizing roadmaps based on win rates, market share, and opportunity size across various sub-TAMs.

Josh Baer inquired about the upcoming drive-through product rollout, asking if it leverages the previously acquired Delphi technology and whether this initiative opens up a new market segment for Toast that was not previously addressed. He followed up by asking if there are other segments of the U.S. market that Toast is currently unable to address due to product limitations, and if these are on the product roadmap for future expansion.

Answer

CEO Aman Narang clarified that Toast's enterprise focus has historically been on non-drive-through segments like casual dining. He confirmed that the planned drive-through product launch this year will significantly open up the drive-through market, particularly for multi-lane operations, which Toast has not primarily addressed before. He acknowledged opportunities across both SMB and enterprise TAMs, citing examples in SMB like non-English speaking operators, bars, pizzerias, and membership clubs, and in enterprise, segments like sports and entertainment and golf, where product enhancements could further expand opportunities. He emphasized that the product team prioritizes roadmaps based on win rates, market share, and opportunity size across various sub-TAMs.

Josh Baer from Morgan Stanley inquired about the drivers behind the better-than-expected year-over-year increase in GPV per location, specifically asking if it was due to customer mix, Toast customers outperforming peers, or the direct impact of Toast's technology on sales.

Answer

CEO Aman Narang noted that GPV per location exceeded expectations in Q3 but normalized in October, attributing the performance partly to Toast's platform helping restaurants run more profitable businesses and stable same-store sales trends.

Josh Baer asked about the drivers behind the better-than-expected GPV per location, inquiring if it was due to customer mix, Toast customers outperforming peers, or the direct impact of Toast's technology on increasing sales.

Answer

CEO Aman Narang noted that GPV per location exceeded expectations in Q3, normalizing slightly in October but remaining in line with expectations. He attributed some of this to Toast's platform helping restaurants run more profitably, citing products like Toast Go 3, and mentioned that same-store sales trends have been balanced.

Joshua Baer asked which specific products the new enterprise client Firehouse Subs is adopting. He also inquired if the launch in Australia signals a broader second wave of international expansion.

Answer

CFO Elena Gomez confirmed that Firehouse Subs is adopting payments along with a broad suite of products, including handhelds and KDS. CEO Aman Narang explained that the Australia launch was accelerated by the ability to deploy a full product suite from day one. While the long-term ambition is global, he did not announce further expansion, emphasizing the need to ensure success in current markets.

Josh Baer pressed for more details on the pricing philosophy for the new Toast IQ platform and asked if Toast is observing any reaction from legacy competitors in response to its recent enterprise wins.

Answer

CEO Aman Narang stated that it is too early to discuss specific pricing for Toast IQ, as the team's primary focus is on proving customer value first, after which monetization will be explored. He added that they have not seen a notable reaction from legacy vendors and remain focused on executing their own product roadmap.

Josh Baer asked for details on the unit economics and payback periods across different growth segments like enterprise, international, and retail, and also inquired about Toast's current AI product capabilities and customer reception.

Answer

CEO Aman Narang explained that payback is managed on a portfolio basis, but each new segment shows healthy signals, such as strong GPV in retail and high rep productivity internationally. He also detailed AI initiatives, including the 'benchmarking tool' for menu insights and 'Sous Chef' for operational data, with a medium-term focus on using AI to improve service at the point-of-sale.

Josh Baer of Morgan Stanley inquired about the outlook for location growth in 2025, asking if the company expects to add more, fewer, or a similar number of locations compared to 2024, given the expanding TAM and strong execution.

Answer

CEO Aman Narang highlighted the strong 7,000 net adds in the quarter, driven by flywheel markets. While not providing a specific number for 2025, he expressed confidence in continued location growth, citing early momentum in retail and international markets, a strong enterprise win, and the strategic importance of scaling the core U.S. business while expanding the TAM.

Josh Baer asked about the relationship between revenue growth and margins within the wide 2026 guidance range, and how Commerce plans to track net new customers, market share, and go-to-market progress without specific customer count disclosures.

Answer

Daniel Lentz, CFO and COO, emphasized that growth is paramount, and Commerce is confident in delivering strong margins. He stated that if revenue is at the high end, additional profit will be generated, with prudent reinvestment into growth. If revenue is at the low end, the company will tighten its belt to meet profit targets. Regarding disclosures, Mr. Lentz explained that GMV growth will be the primary indicator for market share, and NRR will reflect customer retention and expansion, as the previous enterprise customer count was only a subset of their tens of thousands of customers.

Josh Baer asked about the future of customer count disclosures after the removal of enterprise-related metrics, and how investors should track net new customers, market share, and go-to-market progress.

Answer

CFO Daniel Lentz stated there will not be a specific customer count metric going forward, but the company will speak to it. He suggested GMV growth as the best way to understand market share, and NRR to track customer retention and expansion, emphasizing that the focus is on monetizing the platform's scale and health for shareholders.

Josh Baer from Morgan Stanley inquired about the most common software tools used by Nebius Group's AI cloud customers, the proportion of customers utilizing software and services beyond compute, and the current ARR contribution from the software stack.

Answer

Marc Boroditsky, Chief Revenue Officer, stated that 100% of AI cloud customers utilize their AI cloud software. He highlighted new products like Token Factory and Aether releases, the acquisition of Tavily for agentic search, and demand for embedded storage. He noted that software and services make the platform sticky, enabling higher per-GPU-hour charges, and mentioned exploring consumption-based monetization models.

Josh Baer from Morgan Stanley asked about Nebius Group's CapEx and financing plans, specifically how the company intends to meet the $16-$20 billion CapEx guidance.

Answer

Ofir Nave, COO and Board Member, explained that CapEx would be financed primarily from cash flows (cash on hand, core business generation, and upfront payments from long-term contracts), covering about 60% or more. He noted the healthy balance sheet with no corporate debt or asset-backed financing to date, but plans to use these tools in 2026 for an optimal capital structure. He detailed CapEx allocation (power, data centers, GPUs) and reiterated confidence in the $16-$20 billion CapEx based on demand visibility and future hypergrowth. He also mentioned the ATM program as a tool and the value of non-core business stakes (ClickHouse, EveryRight) as future capital sources.

Josh Baer asked about how monday.com's customers and potential customers evaluate the platform amidst rapid innovation and alternatives, inquiring about shifts in sales cycles for upmarket moves or changes in customer behavior. He also asked for an outlook on gross margins for 2026.

Answer

Casey George, monday.com CRO, noted strong upmarket progress, with customers seeking trusted partners and platforms for AI deployment, driving vendor consolidation. She emphasized monday.com's healthy product portfolio and AI as a key differentiator. Eliran Glazer, monday.com CFO, stated that gross margins are expected to be in the high 80s for 2026, consistent with previous investor day guidance.

Josh Baer asked how monday.com's customers and potential customers are evaluating the platform amidst rapid innovation and new technologies, specifically if there are shifts in sales cycles as the company moves upmarket or changes in customer behaviors. He also asked for clarity on the gross margin outlook for 2026.

Answer

Casey George, CRO, noted accelerating upmarket progress, with customers seeking a trusted partner and platform for AI, driving vendor consolidation. He highlighted AI as a differentiator and confirmed positive validation in retention and customer acquisition numbers for larger cohorts. Eliran Glazer, CFO, stated that gross margins for 2026 are expected to be in the high 80s, consistent with previous investor day guidance.

Joshua Baer characterized fiscal 2025 as an investment year, citing headcount growth and margin compression, and asked if investors should expect to see higher, more durable growth or increased operating leverage as a result in future years.

Answer

Co-CEO Eran Zinman agreed that 2025 is a significant investment year for hiring in sales and R&D to capture market opportunities. He stated that the company is already seeing positive results from these investments and expects fiscal 2026 to be 'very different,' with more efficient headcount growth and a clearer realization of the benefits from 2025's investments.

Josh Baer asked about Coursera's proprietary datasets that create a competitive moat against LLMs and new entrants, and how the platform facilitates skilling and workforce transformation. He also sought clarification on whether the Platform Fee constituted a pricing increase for new customers.

Answer

President and CEO Greg Hart detailed Coursera's unique use of internal and external data to map skills to courses and modules, verify mastery, and optimize learning experiences, citing 46% of learners reporting salary increases. He clarified that there is no change to consumer or enterprise pricing associated with the Platform Fee.

Josh Baer asked about Coursera's proprietary datasets and competitive moat that differentiate its learning content and platform for skilling and workforce transformation, especially against LLMs or new entrants.

Answer

Greg Hart, President and CEO of Coursera, explained that Coursera ingests external data and uniquely maps skills to courses and modules, verifying mastery at scale. He noted using Coursera-produced content as a test bed for engagement and skill mastery, citing a 46% salary increase reported by learners. Josh Baer also sought clarification on whether the Platform Fee constituted a pricing increase for new customers. Greg Hart clarified that pricing for both consumer and Enterprise customers remains unchanged.

Joshua Baer inquired about initial takeaways from the OpenAI embedded app integration, including usage, engagement, and expectations, as well as the financial arrangement and potential impact. He also asked about sales and marketing investment priorities, assessing returns, and the year-over-year increase in S&M as a percentage of revenue.

Answer

CEO Greg Hart expressed excitement about the OpenAI partnership as a top-of-funnel opportunity with no direct economic arrangement, noting it's very early days. He highlighted the efficiency of sales and marketing, driven by strong return on ad spend and the growth of Coursera Plus, which now accounts for over 50% of consumer revenue, contributing to 7.7 million new registered learners and 13% consumer segment revenue growth.

Josh Baer asked about early takeaways from the OpenAI embedded app integration, including usage, engagement, expectations, and the economic arrangement and potential financial impact. He also inquired about sales and marketing investment priorities and how Coursera assesses returns on that spend.

Answer

CEO Greg Hart stated that the OpenAI partnership is a top-of-funnel opportunity with no economic arrangement, noting it's very early days but exciting for discovery. Regarding sales and marketing, Mr. Hart explained it's an efficient tool with good returns, especially for driving Coursera Plus subscriptions, which now account for over 50% of consumer segment revenue, leading to 7.7 million new registered learners and 13% consumer growth.

Joshua Baer of Morgan Stanley requested a profile of the typical Coursera Plus subscriber, including their behavior and career stage, and asked for an update on the scale of the subscription business.

Answer

CEO Greg Hart categorized subscribers broadly as 'starters, switchers, and advancers' rather than providing a single profile, noting that content interest varies geographically but is concentrated in AI, tech, and business. CFO Ken Hahn reiterated that Coursera does not disclose specific metrics on the size or growth of its subscription products.

Josh Baer asked for perspective on the timing of when corporate skilling trends will inflect and questioned the rationale for targeting only 100 basis points of margin expansion given the lower growth outlook.

Answer

CEO Gregory Hart suggested the corporate skilling inflection will vary by sector, balanced by near-term macro uncertainty, but believes forward-leaning companies will continue to invest. CFO Ken Hahn explained the 100 bps margin expansion target is a deliberate choice to provide investment capacity to reignite higher growth, noting the costs are budgeted but the potential revenue benefits are not yet included in the forecast.

Josh Baer of Morgan Stanley questioned the strategy to de-emphasize the Degrees segment, pointing out it has recently been the fastest-growing business. He asked if this decision was driven by the segment's profitability.

Answer

CFO Kenneth Hahn explained that Degrees revenue recognition has a lag, and the model has not scaled as quickly as initially hoped. He clarified the decision is about reallocating resources to initiatives with more immediate growth potential, like Enterprise and Consumer, rather than being a direct result of the segment's profitability. CEO Jeff Maggioncalda added that the new focus is on a more standardized, scalable model that leverages Coursera for Campus to offer for-credit courses, which they believe is a more differentiated approach.

Josh Baer requested a breakdown of the Q4 guidance reduction across business segments and asked if the decline in Enterprise Net Retention Rate was due to new, incremental churn or the persistence of previously discussed issues.

Answer

CFO Ken Hahn clarified that the vast majority of the guidance weakness was concentrated in the Consumer segment, as Enterprise revenue is more predictable. He noted Enterprise renewals were only slightly weaker. CEO Jeff Maggioncalda confirmed the NRR drop was primarily due to the persistence of previously discussed factors, such as government budget dynamics, rather than significant new customer losses.

Josh Baer followed up by asking about the primary sources of Lightspeed's new location adds, specifically whether they come from competitive share gains, new store openings, or expansion within existing customer bases.

Answer

CEO Dax Dasilva clarified that new locations are primarily split into three categories: approximately one-third from brand new businesses, one-third from competing cloud vendors that are deemed insufficient, and one-third from businesses migrating from legacy systems.

Josh Baer asked Dax Dasilva to elaborate on Lightspeed's network effects and the complexity of its vertical end-to-end workflows, explaining how these factors create a competitive moat against new entrants, smaller vendors, or point solutions, especially in the context of AI. He also inquired about the primary sources of the recent location additions, specifically distinguishing between competitive share gains, new store openings, and expansion within the existing customer base.

Answer

CEO Dax Dasilva emphasized the unique moat provided by Lightspeed's payments relationship and the powerful wholesale ecosystem, including the NuORDER platform, which connects thousands of brands to independent retailers. He highlighted the incomparable supply-to-consumer workflow that enables unique agentic AI capabilities. Regarding location adds, Mr. Dasilva clarified that new locations are split roughly one-third from brand new businesses, one-third from competing insufficient cloud vendors, and one-third from legacy systems.

Joshua Baer of Morgan Stanley posed a two-part question on artificial intelligence, asking for a high-level view of how AI is expected to impact the retail and hospitality sectors and for details on Lightspeed's specific AI strategy.

Answer

Founder and CEO Dax Dasilva detailed a dual AI strategy. Internally, AI is used to automate repetitive tasks and drive efficiency in support, sales, and development. For customers, Lightspeed is deploying AI-powered features like an e-commerce web builder, menu configuration tools, and benchmarking analytics. The goal is to save merchants time on administrative tasks, allowing them to focus on high-value activities like curating products and menus.

Josh Baer asked about the strategic advantages of being a pan-European provider in the hospitality sector and the size of this market segment. He also requested an outlook on free cash flow for fiscal 2026 and an explanation for the gap between adjusted EBITDA and free cash flow.

Answer

Founder and CEO Dax Dasilva highlighted diversification as a key strength, referencing a total addressable market of $5 billion in Europe for hospitality. CFO Asha Bakshani projected that free cash flow would improve from near-breakeven in fiscal 2025 and approach breakeven or better in fiscal 2026, driven by higher adjusted EBITDA. She explained the gap is due to normal working capital fluctuations and items like taxes on share buybacks.

Josh Baer sought clarification on whether the new regional strategy alters the focus on high-GTV merchants and asked for the revenue contribution and growth rate of the core focus segments (North American retail and European hospitality).

Answer

President JD Saint-Martin confirmed the strategy remains focused on high-GTV (over $500k) customers, as flagship products are designed for these more complex SMBs. CFO Asha Bakshani revealed that these core growth verticals already represent approximately 70% of total revenue and the majority of the company's growth, making the strategic pivot a natural evolution.

Josh Baer asked if stabilizing churn and ramping sales efforts would lead to accelerated growth in key customer cohorts and how that growth breaks down.

Answer

President JD Saint-Martin confirmed that leading indicators point to an acceleration in ICP location growth. He broke down new location sources as typically 65% from new business and 35% from existing customer expansion. He also highlighted that while overall key cohort growth was 4% YoY, the growth for ICP locations on flagship products is in the +20% range.

Josh Baer inquired about the early progress of the MAX program pilot, its deployment and implementation timeline, and when it might open up more broadly. He also asked about the contribution of private equity-backed customers to current wins and growth.

Answer

CEO Ara Mahdessian stated that the MAX program is in early days, intentionally slow-rolled to ensure success, with strong progress so far. CFO Dave Sherry added that private equity customers are top product utilizers, adopting more pro products and growing 500 basis points faster than non-sponsored customers, remaining a key growth factor.

Josh Baer asked about ServiceTitan's market opportunity in commercial, specifically the percentage of hybrid residential/commercial customers, prioritization of commercial expansion within existing accounts, and if hybrid businesses offer a competitive advantage. He also asked about any underperforming areas.

Answer

Co-Founder and President Vahe Kuzoyan noted that most customers have some hybrid business, with larger ones specializing more. ServiceTitan typically lands both residential and commercial sides, seeing its excellence in both as a competitive advantage. Co-Founder and CEO Ara Mahdessian added that while progress is good, they continuously strive for improvement across all aspects of the business.

Joshua Baer from Morgan Stanley asked for more details on the 'stacking S curve' strategy and whether it implies a consistent, planned rollout of new trades, market segments, or Pro Products.

Answer

Co-Founder and President Vahe Kuzoyan emphasized the company's current focus on four key priorities: enterprise, commercial, Pro Products, and roofing. He indicated that while a long tail of other opportunities exists, the primary attention and resources are dedicated to these established S-curves for now.

Joshua Baer from Morgan Stanley inquired about the company's 'stacking S-curve' strategy and whether it implies a consistent plan for entering new trades or launching new products.

Answer

Co-Founder and President, Vahe Kuzoyan emphasized the company's focus on its current priorities: enterprise, commercial, pro products, and roofing. He acknowledged a long tail of future opportunities but stated that the primary attention remains on these four S-curves for now.

Josh Baer inquired about the drivers behind the GTV growth acceleration, seeking details on average ticket sizes, the mix of customer growth, and the impact of private equity roll-outs.

Answer

CFO Dave Sherry explained that beyond a 150 basis point weather benefit, the outperformance was driven by existing residential customers growing faster than in prior periods, but he was not ready to call it a trend. CEO Ara Mahdessian noted that private equity sponsors want to standardize on ServiceTitan and that higher product utilization (TitanScore) correlates with faster customer revenue growth.

Josh Baer inquired about the ongoing trend of private equity-led consolidation in the trades and its impact on ServiceTitan, and also asked about the drivers behind Q4 revenue guidance.

Answer

CEO Ara Mahdessian described consolidators as ideal partners who accelerate customer acquisition, adopt Pro products at a high rate, and exhibit low churn. CFO Dave Sherry addressed guidance, explaining that while Q4 sees seasonal usage revenue declines, strong subscription momentum is expected to drive a small sequential increase in total revenue. He noted a prior-year headwind from an asset disposal will also cease, and the company's goal is to establish a consistent track record rather than engineer large beats.

Josh Baer inquired about the strategic impact of Box's AI and agent innovations on the broader core content management market, specifically asking if it serves as a catalyst for competitive differentiation against legacy vendors and expands the overall market opportunity.

Answer

CEO Aaron Levie highlighted two key dynamics: first, AI is expanding the content management market by enabling new use cases for structuring unstructured data, leading to a significant increase in the total addressable market. Second, AI acts as a catalyst for legacy system displacement, as customers are increasingly motivated to migrate data to Box to leverage AI agents, automate workflows, and build Box apps, creating new value propositions beyond traditional security-driven migrations.

Josh Baer inquired about the broader impact of Box's AI and agent innovation on the core content management market, specifically how it acts as a catalyst against legacy vendors and expands market opportunities.

Answer

Aaron Levie, Box Co-founder and CEO, identified two dynamics: AI agents structuring unstructured data (e.g., contracts, invoices) are creating new use cases, expanding the overall content management market (TAM increase). Additionally, AI is a significant catalyst for customers to migrate from legacy ECM systems to Box, driving increased interest in infrastructure modernization.

Joshua Baer of Morgan Stanley requested an update on platform revenue, specifically the early traction of AI unit consumption, and how the company is tracking towards its growth targets. He also asked about the assumptions for early renewals embedded in future guidance.

Answer

CEO Aaron Levie described AI unit adoption as being in its 'very early days,' with deal sizes being lumpy but showing healthy early interest across various industries for data extraction use cases. CFO Dylan Smith explained that while the company assumes some volume of early renewals in its guidance, it remains conservative, and this has been an area of outperformance recently. He noted they would update assumptions if the trend becomes more consistent.

Josh Baer asked how Box AI and other recent innovations are impacting new customer wins and whether they are accelerating the replacement of legacy enterprise content management (ECM) platforms.

Answer

CEO Aaron Levie confirmed that AI is 'absolutely going to be a catalyst' for replacing legacy systems by providing a compelling modernization trigger. He added that AI also opens a much larger opportunity by addressing use cases in business units that never used traditional ECM, effectively expanding the market. While early Enterprise Advanced demand is from existing customers, the AI story is now central to all new sales conversations.

Josh Baer from Morgan Stanley asked CEO Aaron Levie to identify the new capability with the most significant potential business impact and asked CFO Dylan Smith how that specific opportunity translates to the financial model.

Answer

CEO Aaron Levie highlighted Box Apps as the most transformational capability, enabling customers to build no-code workflow applications directly on the platform, which he compared to Salesforce's Force.com. CFO Dylan Smith noted that while Box Apps is exciting, the financial impact will come from the entire Enterprise Advanced suite, driving higher growth and improved customer economics over time rather than from a single feature.

Josh Baer asked about Asana's competitive positioning as AI agents become pervasive across productivity tools, questioning whether Asana aims to be an orchestration layer for all agentic workflows or one of many agents, and what differentiates its approach.

Answer

Dan Rogers, CEO, clarified that it won't be a winner-takes-all scenario for agents. He differentiated Asana's AI platform by its built-in context (from the Work Graph), controls, and checkpoints, contrasting it with single-player copilots, narrow point solutions, and DIY LLM-based solutions. He emphasized that Asana AI Teammates operate as true team members, providing rich context, human checkpoints, and enterprise-grade controls, scaling across teams rather than just within them.

Josh Baer asked about Asana's competitive position as AI agents become embedded across productivity tools, questioning if Asana aims to be one of many agents or an orchestration layer, and what differentiates its approach.

Answer

CEO Dan Rogers differentiated Asana's AI platform from single-player copilots, point solutions, and DIY approaches. He highlighted Asana's unique context, controls, and checkpoints built on the Work Graph, enabling AI Teammates to operate as true team members and scale across teams, addressing cross-functional and unstructured work.

Joshua Baer from Morgan Stanley asked about Q1 billings performance versus internal plans, after adjusting for the delayed large renewal, and requested color on the billings outlook for the rest of the year. He also asked for clarification on the 'trade-off' involved in the large deal.

Answer

CFO Sonalee Parekh confirmed the pro forma billings growth was around 5% in Q1, noting Q1 is a seasonally lower quarter. She guided that full-year billings should align with the revenue growth range. Regarding the large deal, Parekh confirmed it was a trade-off of a modest annual contract value (ACV) downgrade for a long-term, three-year commitment, which provides significant revenue visibility and future upsell opportunities. Co-Founder and CEO Dustin Moskovitz added that Asana's leadership was just validated by being named a leader in the Forrester Wave for collaborative work management.

Josh Baer asked about the impact of AI Studio's new consumption-based business model on traditional seat-based growth, questioning the potential for both headwinds and tailwinds to seat expansion.

Answer

Co-Founder and CEO Dustin Moskovitz explained that he doesn't foresee near-term headwinds to seat growth, as initial AI Studio use cases are often net-new and Asana's customer base remains underpenetrated. He suggested it could be a tailwind by helping to advance sales conversations. COO Anne Raimondi provided an example of an AI Studio pilot customer that also expanded its seat count in a three-year renewal. CFO Sonalee Parekh added that AI Studio is expected to increase customer stickiness and lifetime value.

Josh Baer inquired about the reasons for pushed deals, their scale, and the confidence in their eventual closure. He also asked for more context regarding the timing of the CFO transition.

Answer

COO Anne Raimondi explained that larger enterprise deals naturally have longer decision cycles, but sentiment is stable and a good portion of the pushed deals already closed in August. Regarding the CFO change, CEO Dustin Moskovitz and CFO Tim Wan clarified it was a long-planned, personal decision for Tim to take time off and was not a reaction to current business performance.

Josh Baer asked about Via's pipeline visibility, including RFP activity, customer decision, and implementation timing, to understand future customer additions. He also inquired if the recent IPO had increased customer awareness and interest in the platform, beyond its M&A branding impact.

Answer

Daniel Ramot, Co-Founder and CEO, reported positive trends across all markets, noting that the IPO created a 'moment' for Via, leading to a different 'timbre' in customer reception and helping develop the pipeline. He highlighted strong dynamics in the U.S. and Europe, particularly the U.K.

Josh Baer inquired about Via's pipeline visibility, including insights into RFP activity, customer decision-making, and implementation timing, to understand the expected cadence of customer additions in the coming quarters. He also asked if the recent IPO had impacted inbound customer conversations and overall platform awareness.

Answer

Daniel Ramot, Co-Founder and CEO, reported positive trends across all markets, noting that the IPO felt like a significant moment, leading to a noticeable shift in customer reception and increased awareness. He highlighted strong dynamics in the U.S. and U.K. as key areas of focus looking ahead.

Josh Baer sought clarification on the economics of IAM adoption, asking if it is accretive to growth and by how much, noting that IAM was not explicitly cited as a primary driver of the quarter's billings outperformance.

Answer

CFO Blake Grayson clarified that e-signature strength, timing, and payment frequency were the main drivers of billings outperformance, though IAM slightly exceeded expectations. He reiterated that customers moving from e-signature-only to IAM see meaningful expansion. CEO Allan Thygesen emphasized IAM's critical role in year-on-year growth and future acceleration, projecting it to be a low double-digit percentage of the book by year-end.

Josh Baer from Morgan Stanley asked for context on how much of the IAM book of business is from upsells versus net new customers, seeking to understand its accretive impact. He also requested details on the smaller non-recurring items that benefited Q1 revenue.

Answer

CFO Blake Grayson explained that while IAM is attracting new customers, the biggest opportunity is upselling the existing install base, and the vast majority of IAM deals are expansions of customer spend. He clarified that the non-recurring revenue items were a collection of smaller positive factors like short-term add-on deals, lower sales returns, and lower bad debt, which are not assumed to be recurring.

Josh Baer asked about the penetration of eSignature globally, the drivers of new customer growth, and the rationale behind the seemingly bullish Q4 billings guidance given the tough year-over-year comparison.

Answer

CEO Allan Thygesen stated that while there is still headroom for new customer growth, especially internationally and in the SMB space, the company's primary focus is on expanding within its massive existing customer base with the new IAM platform. CFO Blake Grayson explained that the Q4 billings guide includes an estimate for early renewals based on the current renewal book, but does not contain a single standout onetime component.

Josh Baer from Morgan Stanley inquired if higher consumption and envelope volumes could lead to customers expanding contracts. He also asked about the proportion of the business under 'all-you-can-eat' agreements and whether lower interest rates could be a tailwind for the company.

Answer

CFO Blake Grayson confirmed that rising consumption is a positive indicator for future expansion but noted that 'all-you-can-eat' deals are a small part of the business, with most customers on fixed-envelope plans. CEO Allan Thygesen added that while lower interest rates would be a positive tailwind, particularly for real estate, the company is now highly diversified across industries, making it less sensitive to that single vertical than it was several years ago.

Joshua Baer from Morgan Stanley asked about Docebo's AI strategy, seeking details on what management is most excited about, the current state of monetization for its AI products like Harmony, and how the company is monitoring and mitigating potential risks from AI.

Answer

CEO Alessio Artuffo expressed excitement about transitioning Docebo to an AI-first company, highlighting the new agentic platform, Harmony, which aims to automate tasks and shift to a learner-first model. He stated that monetization will follow after delivering customer value. To mitigate risks from new entrants or LLMs, Artuffo emphasized Docebo's unique ability to connect corporate knowledge to structured learning and a skills framework, which generic AI tools lack.

Josh Baer asked for the rationale behind maintaining retention assumptions in the guidance, given that past periods of budget scrutiny have impacted retention. He also requested clarification on the timing of the financial impact from the AWS non-renewal.

Answer

CFO Brandon Farber explained that Q1 retention performed as expected despite a record volume of renewals, and the company sees a clear path to gross retention improvements in the coming quarters. On AWS, he clarified the contract ends December 31, 2025, resulting in no revenue impact for 2025. He quantified the contract at approximately 1.8% of total ARR.

Josh Baer of Morgan Stanley asked about Docebo's strategy for landing larger ACV deals, specifically whether the focus is on wall-to-wall wins or departmental expansion. He also questioned if there is more room for operating leverage in sales, marketing, and R&D.

Answer

CEO Alessio Artuffo clarified that the strategy is to land within an organization and expand, citing lululemon as a key example, while noting that large wall-to-wall deals are increasing in the pipeline but are difficult to forecast precisely. Interim CFO Brandon Farber confirmed there is potential for more operating leverage across all departments, driven by the internal adoption of AI to increase efficiency and "do more with less."

Josh Baer from Morgan Stanley questioned Docebo's focus on wall-to-wall LMS deployments versus a land-and-expand strategy and requested an update on the SMB market segment, including any signs of stabilization.

Answer

Interim CEO Alessio Artuffo clarified that Docebo's focus is on being a platform for multiple use cases, noting that 8 of every 10 new customers adopt two or more. CFO Sukaran Mehta added that while the SMB segment remains cautious, the company's primary investment focus is on the mid-market, large enterprise, and government sectors, where it sees superior unit economics and growth.

Joshua Baer of Morgan Stanley inquired about the reiterated full-year EBITDA guidance despite a Q2 beat, asking for details on expense phasing and investments. He also asked about the cause of implementation delays for EvolutionIQ (EIQ) and the steps being taken to improve the process.

Answer

CFO Brian Herb explained that the stable EBITDA guide is due to the timing of expenses, with higher hiring and professional fees planned for the second half of the year, offsetting a $2 million one-time cost benefit in Q2. Regarding EIQ, Herb noted that implementation timelines for a few large deals were extended, delaying revenue recognition, but this does not affect the long-term outlook. CEO Githesh Ramamurthy added that the EIQ pipeline remains strong and customer engagement is high.

Josh Baer asked about CCCS's pricing philosophy, the contribution of price increases to 2025 growth, and whether the moderation in claims volume seen in Q4 2024 is expected to continue into 2025.

Answer

CFO Brian Herb stated that while pricing is reviewed continuously and is a component of NDR, it is not being called out as a specific or material driver of 2025 growth. Regarding claims volume, CEO Githesh Ramamurthy noted that January data can be noisy due to weather. Herb clarified that the 2025 guidance assumes a baseline similar to 2024's performance, without factoring in a significant lift or drag from volume changes.

Josh Baer requested a typical timeline for an early adopter of an AI product like Estimate-STP to convert to revenue and asked for clarification on the reasons for the Q4 guidance reduction.

Answer

CEO Githesh Ramamurthy noted that timelines vary, citing one top-10 carrier that took 3-4 quarters to ramp up Estimate-STP usage. CFO Brian Herb added that while Q4 guidance was adjusted, the full-year guidance range remains consistent. The Q4 adjustment reflects a combination of difficult comps, volume weakness, and deal flow timing.

Joshua Baer of Morgan Stanley asked for CEO Hugo Sarrazin's key observations after his first four months and for details on the pressures affecting Udemy Business's net dollar retention, specifically regarding contracts from the COVID era.

Answer

CEO Hugo Sarrazin detailed the "Udemy 2.0" pivot, driven by customer demand for AI reskilling and integrated learning solutions beyond a simple content catalog. CFO Sarah Blanchard explained that net dollar retention pressure stems from multi-year deals signed in 2021-2022 which lacked the robust implementation and value alignment processes now in place, leading to down-sells or churn upon renewal.

Josh Baer from Morgan Stanley requested more details on the strategic push into consumer subscriptions, asking about specific changes planned for pricing, packaging, and marketing.

Answer

CEO Hugo Sarrazin confirmed that changes are planned across all facets of the consumer business. The strategy involves repositioning the website, merchandising differently, creating new subscription tiers, and launching distinct marketing campaigns. He emphasized that while Udemy has advantages, such as a larger content library, the company will be methodical, using A/B testing to thoughtfully transition customers from the established transactional model.

Josh Baer asked about the difference in interest between AI and non-AI courses from both instructor and learner perspectives, and also inquired about the company's plans for share buybacks following the completion of the $150 million program.

Answer

CEO Greg Brown noted a significant uptick in demand for non-AI soft skills like leadership and communication, citing a large healthcare client win as an example. On capital allocation, CFO Sarah Blanchard reiterated a disciplined approach, prioritizing reinvestment, M&A, and returning cash to shareholders when appropriate, without committing to a new buyback program.

Josh Baer of Morgan Stanley asked for details on the Workday integration, including its unique advantages, and questioned how customers decide between using a platform's native skills tools versus those from a content provider like Udemy.

Answer

CEO Greg Brown explained the Workday integration maps Udemy Business content to the Workday Skills Cloud, promoting internal mobility by allowing learners and admins to view developed skills. He confirmed a customer must use both platforms to get the benefit and stated that Udemy's strategy is to integrate with all major systems, with the choice of tools made on a case-by-case basis with the customer.

Josh Baer questioned the strategy behind the new 'Solution Scout' product, asking if its primary goal is to showcase the superiority of Chegg's solutions over other LLMs or to provide students with choice and multiple options.

Answer

CEO Nathan Schultz explained the strategy is a bit of both. The product aims to save students time from triangulating answers across platforms, a known pain point. It leverages Chegg's model-agnostic AI infrastructure to compare solutions, highlight differences, and showcase Chegg's proprietary tech and learning science, ultimately driving further engagement through 'next best actions'.

An analyst on behalf of Josh Baer of Morgan Stanley asked for more detail on the softening non-subscriber traffic trends through October, questioning the primary drivers and what gives management confidence that traffic can stabilize over time.

Answer

President and CEO Nathan Schultz attributed the softness in traffic and subscriber trends primarily to the pervasive rollout of Google's AI Overviews experience, which provides immediate solutions on the search page. To counter this, he reiterated Chegg's strategy to diversify customer acquisition channels, specifically mentioning the Discord app, continued work on TikTok, and a significant brand campaign to clarify Chegg's value proposition and when students should use its services.

Asked for details on the enterprise account number, including competitive impacts, churn vs. gross adds, and whether the company is moving upmarket. Also requested clarification on the operating margin expansion guidance.

Answer

The enterprise account number has stabilized, with a focus on moving upmarket and increasing average revenue per account. Churn has been steady. The initial margin guidance is conservative, but the company is aiming for low- to mid-single-digit expansion and expects to raise guidance as the year progresses.

Josh Baer asked for clarity on the fiscal 2026 operating margin guidance of 20-25%, specifically what factors would cause results to land at the high versus the low end of that range.

Answer

CFO Lauren Dillard responded that while it's too early to discuss top-line growth, the company has levers to drive margin expansion. The outcome within the 20-25% range will be influenced by revenue growth, the pace of offshoring, and the speed at which other business efficiencies are harvested.

Josh Baer inquired about the dynamics behind the quarterly billings growth forecast, specifically the step-down in Q3 followed by a reacceleration in Q4. He also asked for feedback on the three AI features currently in private beta, including customer usage and general interest levels.

Answer

Pete Godbole explained that the Q4 billings 'reacceleration' is primarily an illusion created by easier year-over-year comps, and a two-year stacked view actually implies a deceleration in the second half. Mark Mader responded that interest in AI is very high, with plans to expand access significantly at their ENGAGE conference. Early feedback from the controlled beta group has been validating, showing significant cost and time savings for users.

Requested more details on the initial customer behavior and impact of the new pricing model, including user monetization, benefits to ARR, and the evolution of price per paid seat.

Answer

Based on the first week of data from the first cohort of customers hitting their true-up period, the company is seeing confirming results: more users, more value realized, and more ARR. The thesis of a lower price per user leading to a higher quantity of users is playing out as expected, but they cautioned that it is very early data.

Sought to clarify the specific nature of the macro impact on SMBs, asking whether it was logo churn, seat contraction, or reduced expansion, and if customers were switching to other tools.

Answer

The primary issue in the SMB segment is a reduction in gross expansion (customers buying fewer new seats) due to increased budget scrutiny. This is followed by a smaller uptick in seat reductions. It is not primarily a logo churn issue or a competitive loss to other tools; rather, it's a function of budget constraints.

Asked for a breakdown of which growth businesses are expected to contribute most to growth in the near-term versus the long-term, and requested an update on gross retention rates.

Answer

The company stated that pro forma ARR growth was in line with expectations and medium-term targets for both core and growth businesses, but declined to break out contributions from individual segments further at this time. They also did not provide a quarterly update on gross retention but noted they feel positive about it heading into the main renewal season.