Ken Wong

Ken Wong asked about the expected timeline for adoption of Underwriting and Pricing Center, comparing it to the longer lift of PolicyCenter versus faster adoption of ClaimCenter, and inquired about initial feedback and potential stumbling blocks. He also asked if the nice uptick in subscription and support gross margins was due to efficiency gains or one-time items.

Answer

CEO Mike Rosenbaum suggested adoption could be slightly faster than core products, potentially more incremental or greenfield, and not an 'all-or-nothing' replacement, with positive initial receptivity. CFO Jeff Cooper confirmed a very small contribution from one-time items, but primarily attributed the margin uptick to significant progress in driving efficiency across the organization, leading to a raised full-year guide.

Ken Wong asked for context on the Liberty Mutual deal's fully ramped basis, specifically how it compares given Guidewire's practice of capping fully ramped ARR at five years, and its comparability for further years of the arrangement.

Answer

CFO Jeff Cooper reiterated that Guidewire caps its fully ramped ARR metric at five years and cannot disclose specific terms of the Liberty Mutual deal. He noted that it was a very meaningful deal that significantly changes the financial and strategic arrangement with the customer.

Ken Wong asked for color on the contributing factors to the Q4 bookings guide, specifically how it compares to the previous quarter's raise which was primarily driven by the core business. He also inquired about the profitability outlook, asking if, despite the upfront costs and lower gross margins, some margin expansion could still be expected, and sought Lior's early thoughts on this.

Answer

CFO Lior Shemesh clarified that most of the increase in the Q4 bookings guidance is now driven by the strength of the Base44 business, a shift from previous expectations. He stated that the margin headwind is expected to continue, and even hoped for, as it signifies high demand and growth. Lior indicated that while there will be short-term pressure on margins, he is unsure when margin expansion will resume, suggesting it depends on Base44's demand, but reiterated that the company has a track record of driving profitability over time with new products.

Ken Wong of Oppenheimer & Co. questioned the slight decline in Revenue Per User (RPU) despite a focus on up-market customers and sought insight into future RPU trends. He also asked about the potential impact of declining SEO traffic on demand for web intelligence and core products, considering the company's AI tools for other channels.

Answer

Rami Myerson, Head of Investor Relations, clarified that RPU fluctuations are influenced by the addition of customers, particularly those below the average, emphasizing that increasing customer count for future land-and-expand opportunities is the primary focus. Or Offer, Co-Founder and CEO, countered that declining SEO traffic actually increases demand for Similarweb's solutions as companies seek to understand and compensate for traffic gaps. Maoz Lakovski, Chief Business Officer, added that they are actively investing in GEO/AEO offerings and seeing positive initial monetization from Web Intelligence 4.0.

Ken Wong sought feedback from Groundbreak attendees regarding the competitive landscape and asked about the key drivers behind customers opting for longer contract durations.

Answer

Tooey Courtemanche, Founder, CEO, and President, Procore Technologies, stated that no customers mentioned competitors at Groundbreak, emphasizing overwhelmingly positive feedback on Procore's achievements and excitement about AI. Matt Puljiz, Senior Vice President of Finance, Procore Technologies, added that internal data shows a favorable competitive dynamic. Matt Puljiz explained that longer contract durations are primarily driven by pooled contract models, offering customers flexibility with project schedule uncertainty, and are not incentivized by the go-to-market team. Tooey Courtemanche added that Procore's mission-critical nature makes longer-term investments sensible for customers.