Koji Ikeda

Koji Ikeda of Bank of America asked about contract visibility with large AI-native customers and the company's strategy for expanding its security capabilities, including its M&A philosophy.

Answer

CEO Olivier Pomel stated that while he cannot speak for specific customers, Datadog has strong product engagement and a high-retention model, though contract renegotiations can cause short-term revenue fluctuations. He also confirmed that Datadog will continue to pursue M&A in security to cover more product areas and address future AI-driven disruptions.

Koji Ikeda asked about the potential for Infrastructure Monitoring growth to accelerate and its triggers, and also inquired about plans for localized international pricing and the impact of FX on margins.

Answer

CEO Olivier Pomel identified potential growth triggers for Infrastructure Monitoring, including emerging needs like GPU management, covering large on-prem and IoT fleets, and expanding network monitoring. CFO David Obstler stated that Datadog is a largely US dollar-based company with minimal FX exposure, and while they occasionally consider local billing, it is not a significant factor in their results or planning.

Koji Ikeda asked which of Intapp's two target verticals (financial services or professional services) is more open to adopting AI tools today, and for the less open one, what catalyst might drive greater AI adoption. He also asked for clarification on the volatility and smoothing out of calculated billings, given the strong ARR dynamics.

Answer

John Hall (Chairman and CEO, Intapp) stated that both markets are excited about AI, particularly for research-style work, but the key is integrating AI into overall management workflows with proprietary data and governance. He highlighted Intapp's focus on vertical AI solutions to improve productivity compliantly across both verticals, rather than contrasting them. David Morton (CFO, Intapp) expects billings to smooth out in six to nine months as fixed-fee services and license revenue transitions, noting that deferred revenue shows pure growth year-over-year despite quarterly fluctuations.

Koji Ikeda asked which of Intapp's target verticals (financial services or professional services) is more open to adopting AI tools and what catalysts might drive adoption in the less open vertical. He also inquired about the volatility in calculated billings and the potential for smoothing out.

Answer

CEO John Hall stated that both verticals are enthusiastic about AI, particularly for research-style work. The focus is on integrating AI with proprietary firm data, governance, and operational management for compliant productivity. He emphasized vertical AI solutions rather than contrasting the two verticals. CFO David Morton expects billings to smooth out in six to nine months as fixed-fee services and license transitions complete, noting year-over-year growth in deferred revenue.

Koji Ikeda from Bank of America Corporation asked for clarification on the 27% year-over-year growth in Remaining Performance Obligations (RPO) and inquired about any potential for quarterly volatility in the license revenue line item during fiscal 2026 due to renewal seasonality.

Answer

CFO David Morton clarified that the RPO growth was not influenced by any material changes in contract duration or seasonality. Regarding the license revenue line, Morton acknowledged there could be some quarterly fluctuations, particularly between Q2 and Q3, as the company manages the timing of client migrations to the cloud, and he committed to maintaining transparency on this front.

Koji Ikeda of Bank of America asked about the SaaS revenue performance relative to guidance, noting it came in slightly below the high end. He also requested more granular detail on customer conversations and the demand environment across different verticals like legal, consulting, and private equity.

Answer

CFO David Morton explained that SaaS revenue performance within the narrow guided range is subject to the timing of deal execution during the quarter. Chairman and CEO John Hall added that demand remains steady, with private capital clients providing stable revenue from management fees and advisory firms consistently moving to digitalize, often replacing horizontal CRMs with Intapp's purpose-built platform.

Koji Ikeda questioned the potential for cloud ARR growth to re-accelerate given its recent deceleration and asked for an update on the percentage of net new ACV from AI products.

Answer

CEO John Hall noted that all new business is cloud-based and that larger, albeit lumpier, enterprise deals present a significant opportunity for growth acceleration. CFO David Morton clarified that the company will provide updates on AI's contribution to ACV on an annual basis, rather than quarterly, but confirmed the monetization strategy is proceeding as planned.

Koji Ikeda asked about Marigold's potential contribution to 2026, suggesting the $190 million estimate might be conservative given Zeta's acquisition track record, and how Zeta's brand image is evolving with its customer base.

Answer

David Steinberg (Co-Founder, Chairman, and CEO, Zeta Global) reiterated that Marigold's contribution will be updated upon closing to avoid confusion with organic guidance, emphasizing Zeta's strong M&A track record and belief that Marigold will create a significant tailwind, especially by expanding its 100 enterprise clients to multiple use cases. He described Zeta's brand evolution from 'Zeta Who' three years ago to 'Why Zeta' today, where clients view Zeta as an advanced, cutting-edge, and game-changing company for AI and data deployment.

Koji Ikeda asked about the Marigold acquisition's contribution for 2026, suggesting that the previously guided $190 million might understate the opportunity given Zeta's successful acquisition track record. He also inquired about the evolution of Zeta's brand image with its customer base compared to three years ago.

Answer

CEO David Steinberg clarified that the 2026 organic guidance is separate from Marigold, which will be updated upon closing, to avoid confusion. He reiterated Zeta's strong M&A track record and belief that Marigold will create a significant tailwind, especially by expanding its 100 enterprise clients from one to multiple use cases, generating 3x-3.5x more revenue. David Steinberg described Zeta's brand image evolution from "Zeta Who" three years ago to "Why Zeta" today, now seen as an advanced, cutting-edge, and game-changing player in AI and data.

Koji Ikeda inquired about the product strategy, asking which use case drives better lands versus expansion, and sought clarity on the long-term target for gross margins given the rising direct revenue mix.

Answer

CEO David Steinberg explained that while all use cases are growing, the OneZeta strategy creates a 'flywheel' that improves ROI across all products, driving significant wallet share gains. CFO Chris Greiner added that the Net Promoter Score (NPS) is higher for multi-use case clients. On margins, Chris reiterated the Zeta 2028 plan's goal for 100-300 bps improvement in cost of revenue, noting the current 200 bps improvement is on track.

Koji Ikeda of Bank of America pressed for details on what, beyond general macro uncertainty, is informing the conservative second-half guidance, given the strong current demand. He also asked for clarification on the sequential decline in ARPU.

Answer

CEO David Steinberg was emphatic that the guidance is purely a reflection of conservatism and not based on any negative signals or changes in the business, pipeline, or customer conversations. He stated the goal was to de-risk the back half. CFO Chris Greiner explained that the sequential ARPU decline from Q4 to Q1 is typical seasonality, compounded by the integration of LiveIntent's smaller-ARPU customers. He pointed to the strong 23% YoY growth in superscale ARPU as a better indicator of health.

Koji Ikeda of BofA Securities sought clarification on the 2025 organic growth guidance of 21%, comparing it to a 17% figure mentioned in the prior quarter's call, and asked about the level of conservatism baked into the current forecast.

Answer

CFO Chris Greiner reconciled the figures, explaining that after normalizing the 2024 revenue base for acquisitions and political revenue, the 2025 guidance implies 21% organic growth, which is higher than the previous discussion. Both he and CEO David Steinberg affirmed their consistent approach of issuing conservative guidance that can be met with the low end of their KPI targets, with Steinberg noting their goal is to continue the 14-quarter streak of beating and raising.

Koji Ikeda from Bank of America questioned why the 2025 organic growth outlook appears to be in the low 20s despite recent performance over 30%. He also asked for an update on LiveIntent's growth rate and any purchase accounting considerations.

Answer

CEO David Steinberg and CFO Christopher Greiner clarified that the 2025 commentary reflects their standard conservative approach to initial guidance and that they see no problematic business trends. Greiner added that LiveIntent's growth rate is around 20%, and specific financial details will be provided in February.

Koji Ikeda of Bank of America questioned the preliminary 2025 organic growth outlook of low-20s, noting it seemed conservative given recent 30%+ performance. He also asked for an update on LiveIntent's growth rate and any purchase accounting considerations.

Answer

CFO Christopher Greiner and CEO David Steinberg both characterized the 2025 outlook as intentionally conservative, consistent with their historical approach of setting achievable targets they aim to beat. Regarding LiveIntent, Greiner reiterated its growth rate is around 20%+ and that specific financial details and accounting impacts would be provided in February.

Koji Ikeda from Bank of America inquired about potential triggers that could unlock more budget from large general contractors and asked about the trend in Net Revenue Retention (NRR) excluding the new transaction model.

Answer

President and CEO Andrew Anagnost identified industrialized construction and prefabrication as the key long-term technological unlock for customers who already face capacity constraints and project backlogs. EVP & CFO Janesh Moorjani clarified that while difficult to disaggregate, NRR excluding the new model's impact would have been consistent with the prior 100%-110% range, and the language change in the deck simply reflects Q2's strength.

Koji Ikeda asked whether an improving demand environment or nCino's vertical AI strategy would be a stronger growth driver over the next several years. He also inquired about the expected pace of improvement for Professional Services gross margin.

Answer

CEO Sean Desmond emphasized that nCino is focused on execution and delivering outcomes, with AI being a key enabler, rather than relying on external factors like interest rates. CFO Greg Orenstein indicated that Professional Services gross margin improvement is expected to be gradual as the company transitions from older projects to newer, more efficient initiatives.

Koji Ikeda from Bank of America inquired about the recent workforce and office space reductions, asking about further optimization opportunities and how AI is driving efficiency. He also asked for clarification on the recent deceleration in billings growth.

Answer

CEO Sean Desmond explained the office space reduction was about eliminating underutilized facilities and that the workforce reduction was driven by a need for organizational alignment and new efficiencies gained from AI, which he expects will increase software development velocity. CFO Greg Orenstein noted that billings can be lumpy due to the timing of large deals and that there was nothing unusual to call out in the quarter's billings performance.

Koji Ikeda requested more detail on the factors giving management confidence in improved execution and asked how the company would balance growth and profitability if growth remains constrained into fiscal 2027.

Answer

CEO Sean Desmond cited confidence from the full integration of the DocFox acquisition, leadership changes in EMEA, and the maturation of the enterprise mortgage solution. CFO Greg Orenstein addressed the growth-profitability balance by reiterating the company's focus on achieving the 'Rule of 40' around Q4 of the next fiscal year, noting it is not solely contingent on growth.

Koji Ikeda asked about the mortgage volume increase required for all customers to exceed their minimums and what would be a bigger driver for future customer spending: lower rates or a resilient economy.

Answer

Chief Financial Officer Greg Orenstein stated it's difficult to specify a single volume threshold for mortgage minimums, as they vary by customer. Chief Executive Officer Pierre Naude identified a combination of factors driving future spending, including an optimistic economic outlook, potential for M&A, continuous platform innovation, the new pricing model, and the adoption of AI.

Koji Ikeda sought clarification on the Q3 guidance, asking if it factored in a higher propensity for SaaS conversions from on-premise licenses and the potential impact of the CPM Express offering.

Answer

CFO Bill Koefoed confirmed that the guidance prudently contemplates the possibility of federal government contracts migrating from license to SaaS. He clarified that CPM Express is the same core product, with its main differentiator being implementation speed through pre-configured best practices, not a different pricing structure for the software itself.

Koji Ikeda of Bank of America sought more detail on the conservative revenue guidance, asking if there were any changes in the underlying growth assumptions for different deployment models like SaaS or on-premise.

Answer

CFO Bill Koefoed responded by attributing the cautious guidance to macroeconomic announcements that have occurred since the previous quarter. He did not detail specific changes in deployment assumptions but reiterated that the company's leading indicators, such as the sales pipeline, remain quite positive.

Koji Ikeda of Bank of America asked about the potential for Annual Recurring Revenue (ARR) and subscription revenue growth to accelerate in 2025, highlighting the strong growth of the SaaS ARR component.

Answer

Co-Founder and CEO Tom Shea acknowledged the strong performance but reiterated that the company only provides quantitative guidance for total revenue and operating margin. He confirmed that subscription revenue is expected to grow faster than total revenue, partly driven by ongoing conversions to SaaS, but did not provide a specific growth target for ARR or subscription revenue.

Koji Ikeda of Bank of America inquired about the competitive environment versus a year ago, specifically asking for differentiation against Hyperion's cloud offering and the drivers of confidence in continuing to win replacements.

Answer

CEO Tom Shea emphasized that OneStream's primary competitive advantage is its single, unified platform, a foundational architectural choice that is difficult for competitors with siloed cloud products to replicate. He stated that while competition makes them better, this platform approach, combined with continuous innovation, fortifies their market position.

Koji Ikeda from Bank of America asked about the company's go-to-market evolution, questioning if the current team is fully in place or if additional resources, such as executives or capacity, are needed to execute the long-term growth strategy.

Answer

CEO Eric Friedrichsen described the company's progress as a multi-phase transformation journey, stating that the current phase is focused on execution ('it's go time'). He acknowledged that while more transformation is ahead, the team is now substantially aligned and in place to execute and deliver results, viewing the remaining transformation as further opportunity for improvement.

Koji Ikeda inquired about the current selling environment for AI legal technology, questioning if increased competition was creating buyer confusion, and asked for clarification on the company's Q4 2026 adjusted EBITDA breakeven target, specifically if it was a firm commitment regardless of growth.

Answer

CEO Eric Friedrichsen responded that the selling environment for AI tools has actually become easier, as Disco's generative AI products like Cecilia Q&A and Cecilia Auto Review offer very specific, defensible solutions to customer problems. Regarding the profitability target, Friedrichsen expressed confidence in the company's strategy to grow revenue efficiently by focusing on larger customers, which he believes will enable them to achieve the Q4 2026 breakeven goal.

Koji Ikeda inquired about the strategic impact of the new Chief Sales Officer, the scope of the recent restructuring, and the reason for omitting the customer count metric from prepared remarks.

Answer

CEO Eric Friedrichsen expressed confidence in new Chief Sales Officer Lauren Caruso, citing her enterprise mindset and deep company knowledge, while clarifying he retains ultimate revenue responsibility. He explained the restructuring was a strategic refocusing, not a cost-cutting measure, affecting 31 roles and opening 22 new ones to target enterprise customers. Friedrichsen also provided the customer count (1,439) but stated the company's focus has shifted from total count to the growth of high-value customers, citing positive trends in the >$100k cohort and software dollar net retention.

Koji Ikeda asked why Dynatrace did not raise its full-year constant currency ARR guidance despite a strong Q1 performance, particularly in DPS, logs, and ODC revenue.

Answer

CFO Jim Benson explained that while the company is pleased with the exceptional Q1 start, it's still early in the fiscal year. He noted that the growing pipeline is heavily weighted towards large deals, which have more uncertainty around closing times. Therefore, management is maintaining a prudent approach and will reassess after Q2.

Koji Ikeda questioned whether ARR and NRR are still the most appropriate metrics for gauging the business's health, given that on-demand consumption is becoming a larger part of the story.

Answer

CFO Jim Benson affirmed that ARR and NRR remain important metrics but should no longer be viewed in isolation. He advised that to understand the company's health accurately, investors must now look at ARR, NRR, and on-demand consumption (ODC) collectively. The DPS model is successfully driving consumption, but the financial benefit is now captured across these different metrics, with a potential lag in ARR recognition.

Koji Ikeda of Bank of America asked for clarification on the CEO transition, noting the roles seemed consistent with past observations, and requested Therese Tucker's perspective on the adoption curve for AI in the Office of the CFO.

Answer

Co-CEO Therese Tucker clarified her transition allows her to step back from operational duties to focus on her strengths in customer and technology strategy. On AI, she stressed the importance of separating hype from reality, highlighting that for the finance market, AI must be auditable, verifiable, and built on well-structured data to ensure consistency—a key BlackLine focus. Co-CEO Owen Ryan added that an upcoming conference session will address these regulatory and practical barriers.

Koji Ikeda inquired about the new platform pricing model, asking about adoption dynamics, the reason for the sequential decline in total users, and which customer segments are being targeted first.

Answer

CFO Patrick Villanova explained that the user count declines as customers adopt the new model, as they are no longer user-based. He noted that Q1 adoption exceeded expectations, with the phased rollout targeting upper mid-market and enterprise customers in North America first, as the unlimited model resonates most with clients who have large user bases.

Koji Ikeda of Bank of America questioned the source of management's confidence in the guided revenue inflection for 2025 and asked if introducing many changes at once caused deal pushouts.

Answer

Co-CEO Owen Ryan attributed the confidence to a rapidly growing and higher-quality pipeline with larger deals, strong revenue renewals, and progress in industry verticals. He acknowledged that the volume of innovation has been a challenge for customers and partners to absorb, suggesting it's a lesson learned and that future major announcements will be timed earlier in the year.

Koji Ikeda asked for a preview of what to expect from the Accounting Studio product at the upcoming user conference and how to prioritize Studio versus the SAP partnership as medium-term growth drivers.

Answer

Co-CEO Therese Tucker stated that Studio is generating a "very good reaction" from customers and represents a "completely new area of growth" for BlackLine. Co-CEO Owen Ryan added that while Studio is a key focus, the SAP partnership also offers significant growth potential. He emphasized that SAP's own strategic focus on the Office of the CFO aligns perfectly with BlackLine's, which should bode well for the relationship moving forward.

Koji Ikeda of Bank of America questioned how to reconcile the implied negative Q4 exit growth rate in the guidance with the Street's more optimistic growth estimates for 2026.

Answer

CFO Graham O'Brien explained that his guidance philosophy remains consistent and is based on business performance, suggesting the implied Q4 figure reflects this approach. He noted that performance in the second half of 2025 will be crucial for 2026 and deferred specific commentary until closer to that time.

Koji Ikeda of Bank of America asked for help reconciling the implied negative Q4 exit growth rate with Wall Street's more positive growth estimates for 2026.

Answer

CFO Graham O'Brien explained that the guidance raise was driven by current business performance and his philosophy on guidance remains consistent. He noted that it is too early to discuss 2026 specifics, as performance in the second half of 2025 will be a critical factor for the following year.

Koji Ikeda from Bank of America asked a philosophical question about how Lightspeed balances its focus on profitable growth against a potentially improving demand environment, ensuring the company is not 'leaving anything on the table.'

Answer

Founder and CEO Dax Dasilva responded that the current strategy is designed to be aggressive, citing significant investments in ramping the outbound sales team and enhancing product competitiveness, funded by efficiency markets. He characterized the current plan as 'year one' of a three-year transformation, indicating that early successes are building confidence for future aggressive growth initiatives.

Koji Ikeda asked for clarification on the fiscal 2026 guidance, questioning whether the ramping sales capacity or the uncertain macro environment was more conservatively factored into the forecast. He also inquired about the drivers for gross profit growing faster than revenue and the sustainability of this trend.

Answer

CFO Asha Bakshani confirmed that the guidance includes more conservatism around the macroeconomic outlook, as it is less within the company's control. In contrast, management is highly confident in executing the outbound sales hiring plan. She explained that gross profit is expected to outpace revenue growth because future growth will be driven primarily by high-margin software (over 80% margin), a trend she expects to continue in line with the company's long-term targets.

Koji Ikeda of Bank of America sought details on the 'AgenTeq AI' strategy, asking about the high-level approach to monetization, such as whether features would be embedded, part of premium tiers, or sold as standalone SKUs. He also asked for specifics on which parts of the recent tax law changes are most impactful for Blackbaud.

Answer

President, CEO & Vice Chairman Mike Gianoni explained that while some AI is already embedded in products, new AgenTeq solutions like a 'virtual fundraiser' will be separately monetized products with additive revenue potential. EVP & CFO Chad Anderson confirmed the most material tax change is the repeal of Section 174, which removes the requirement to capitalize and amortize domestic R&D expenses for tax purposes, providing a significant cash tax benefit.

Koji Ikeda from Bank of America asked for the key drivers behind management's confidence in the end market's resiliency, the status of this year's contract renewals, and the potential for increasing the share buyback program.

Answer

CEO Michael Gianoni cited healthy end markets and strong customer reception to recent product innovations, including AI, as drivers of confidence. He confirmed renewals are proceeding as normal with high retention. CFO Tony Boor noted renewal seasonality peaks in Q2/Q3 and stated that while the company is on track with its buyback plan, any changes to the program will be evaluated quarterly based on market conditions.

Koji Ikeda from Bank of America inquired about the contrast between a modest Q1 revenue beat and strong deferred revenue metrics like RPO and CRPO, asking for details on deal linearity and demand trends.

Answer

CFO Brian Robbins stated that the quarter had no surprises and attributed the results to two main factors: a revenue mix that favored SaaS, which has ratable recognition, and back-end weighted deal linearity in the quarter. He also noted the quarter had fewer business days but confirmed there was no change to the company's guidance philosophy.

Koji Ikeda from Bank of America asked how GitLab drives strong utilization of its platform features after a sale and whether high utilization is a necessary precursor to adopting add-ons like Duo.

Answer

CEO William Staples described a comprehensive approach involving the entire team and partners. This includes creating customer success plans, offering dedicated success resources, and providing professional services. He also highlighted the role of technical partners in assisting with migration and process changes. Furthermore, he noted that GitLab's deployment flexibility (on-premise, cloud, air-gapped) facilitates a smoother adoption journey for customers.

Koji Ikeda asked what drove the strong Q3 revenue beat beyond conservative guidance and inquired about potential factors that could cause the Q4 exit growth rate to slow over the next year.

Answer

CFO Brian Robbins attributed the outperformance to broad-based execution, including a record public sector quarter, strong Ultimate tier adoption, and the lowest churn in 12 quarters. He noted that new growth drivers like Duo and Dedicated take time to materially impact revenue at scale.

Koji Ikeda requested more details on the new 3 B2C offering, including how it works and the level of customer demand. He also asked about the potential tariff impact on U.S.-based merchants who are exporting goods globally.

Answer

CEO Amir Schlachet explained that 3 B2C allows merchants to establish a local legal entity to import goods at lower commercial tariffs, while Global-e manages the complex in-market operations. President Nir Debbi added that for U.S. exporters, tariffs on their imported inventory can be reclaimed upon export, potentially creating a sales advantage for cross-border over domestic channels.

Koji Ikeda questioned the conservatism of the 2025 take rate guidance, noting that the 2024 actual rate came in below the initial forecast. He asked what factors, besides multi-local and tariffs, could influence the take rate.

Answer

CFO Ofer Koren described the 2025 guidance as 'thoughtful' and based on past experience. He reiterated that the primary driver for the expected decrease is a higher share of multi-local business. He identified faster adoption of value-added services as a potential positive driver for the take rate, while a higher-than-expected shift to multi-local could be a negative factor.

Koji Ikeda asked about the level of conservatism in the 2025 take rate guidance of 14.9% versus the 2024 actual of 15.5%, and inquired about potential drivers beyond the discussed multi-local and tariff factors.

Answer

CFO Ofer Koren described the 2025 guidance as a thoughtful estimate based on the expected increase in lower-take-rate multi-local business. He noted that faster adoption of value-added services could positively impact the take rate, while a higher-than-anticipated shift to multi-local strategies could negatively affect it.

Koji Ikeda questioned the drivers behind the strong Q4 GMV guidance, noting the significant sequential increase and asking what current transaction trends support this confidence.

Answer

CFO Ofer Koren attributed the confident Q4 outlook to two main factors: the successful launch of new large merchants like Harrods and Victoria's Secret, which are trading above expectations, and a notable improvement in consumer sentiment that began in September and continued through October and early November.

On behalf of Koji Ikeda, an analyst asked about the improving churn in the mortgage business, inquiring what it would take for retention to be considered stabilized and if the current improvement could be a sustainable trend.

Answer

President Larry Katz confirmed that retention has improved but stated it was too early to call it a definitive trend. He emphasized that customer churn is concentrated among very small clients with low ARR, which contributes to the overall growth in average ARR per customer. He expressed confidence in the current direction of the business and churn trends.

Koji Ikeda asked about the risk of further down-sells from large data verification customers and sought to understand the shape of the mortgage demand curve once interest rates fall below the '5 handle'.

Answer

CEO Nicolaas Vlok characterized the recent large customer down-sell as a 'unique situation' and a one-off event that is not expected to be repeated. President and CFO Larry Katz explained that while he couldn't provide a specific sensitivity, mortgage rates in the 5% and 4% range would create significant opportunity by pushing more customers above their minimums and unlocking pent-up purchase and refinance demand.

Koji Ikeda questioned the company's confidence in its 2027 revenue target, which implies growth acceleration. He also asked about the drivers of the record Q1 free cash flow margin and how to view it against the full-year guidance.

Answer

CFO Ed Grabscheid stated that while JFrog remains on track with its long-term model, it will be re-evaluated with a potential update in the second half of 2025 due to market uncertainty. He attributed the strong Q1 free cash flow to seasonal collections and noted that the conservative top-line guidance also makes the FCF forecast conservative.

Koji Ikeda asked for an explanation for the guided free cash flow margin degradation in 2025 (to around 19%) after achieving a strong 25.2% in 2024, questioning if it was an effect of conservative revenue guidance or other factors, and how it aligns with the 2027 target.

Answer

CFO Ed Grabscheid explained that 2024's strong free cash flow benefited from large, multi-year deals where some customers chose to pay upfront, which is not always predictable. He stated the 2025 guidance is based on a fundamental practice of a 4-5% difference from operating margin. CEO Shlomi Ben Haim added that disciplined efficiency is part of JFrog's DNA and the strong performance is consistent with their long-term strategy.

Koji Ikeda asked for more detail on why buyers might be reserved in committing to larger deals, questioning if it's due to JFrog's specific deployment model or a broader need for customers to understand the full platform offering.

Answer

CEO Shlomi Haim countered the premise, highlighting that JFrog just closed three of its largest deals ever. He explained that the perceived reservation is not a lack of interest but a function of deal size; these large, strategic platform deals now require C-level and board-level approval, which naturally extends the sales cycle, especially in the current macro environment.

George Hervey, on behalf of Koji Ikeda, asked about the new $50 million share repurchase program and the company's broader philosophy on capital allocation between buybacks and internal investments.

Answer

CFO Andrew Casey explained that the share repurchase program is a new tool for the company to manage dilution and to capitalize on potential stock price dislocations. He emphasized that it is a broad program with nothing specifically earmarked, viewing it as one of several tools for effective capital management as the company scales.

Koji Ikeda asked about recent sales attrition, the current state of sales capacity, and the strategy for go-to-market investments. He also posed a philosophical question about leveraging Amplitude's data to power an agentic AI offering.

Answer

CEO Spenser Skates explained that some seller attrition is a natural part of maturing and moving upmarket, and it's not beyond normal expectations. CFO Andrew Casey added that they analyze sales efficiency metrics before making additional investments. Regarding AI, Spenser Skates confirmed plans to launch an "Amplitude agent" in the second half of the year to drive automated insights and actions, leveraging their proprietary user behavior data.

Koji Ikeda of BofA Securities asked for perspective on ServiceNow's acquisition of a data catalog vendor, questioning if it represented market validation or increased competition. He also sought to reconcile why migration net new cloud ARR was flat while churn from on-prem was accelerating.

Answer

CEO Amit Walia dismissed the acquisition as a competitive threat, noting the target was a very small company and that platforms like ServiceNow often acquire tools for their own internal use cases, which is distinct from Informatica's enterprise-wide data management offering. CFO Mike McLaughlin explained the accelerated on-prem churn is due to a 'double overlap' of maintenance roll-offs from two different modernization programs, which creates a temporary distortion not directly tied to the current quarter's new cloud ARR.

Koji Ikeda of Bank of America sought to reconcile the mission-critical nature of Informatica's products with the recent renewal difficulties, asking if competition, pricing, or budget shifts were to blame. He also questioned the persistent difficulty in accurately forecasting GAAP total revenue.

Answer

CEO Amit Walia clarified that the renewal issues were not due to increased competition but rather internal operational missteps and some partial churn where customers reduced scope rather than leaving entirely. CFO Mike McLaughlin added that cloud renewal rates remain healthy in the low 90s despite the miss. Regarding GAAP revenue guidance, McLaughlin explained its high sensitivity to ASC 606 accounting for on-premise self-managed renewals, where small changes in renewal rates or contract term lengths have an outsized, immediate impact on recognized revenue.

Koji Ikeda inquired about Informatica's medium-term cloud subscription ARR growth target, noting that current performance above the 31-33% CAGR implies a future deceleration. He also asked for color on the slight sequential dip in customers with over $1 million in subscription ARR.

Answer

CFO Mike McLaughlin stated that the company is tracking in line with its medium-term guidance and that current performance provides confidence. CEO Amit Walia attributed the dip in >$1M customers to quarterly fluctuations from specific events, such as the conclusion of COVID-related use cases for state and local clients and the roll-off of maintenance post-migration. Walia highlighted stronger underlying trends, including a 15% YoY increase in average ARR per subscription customer.

Koji Ikeda from Bank of America asked to quantify the impact of migration credits on net new cloud ARR and inquired about the visibility into CLAIRE GPT usage through the IPU consumption model.

Answer

CFO Mike McLaughlin explained that while migration credits temporarily lower the recognized cloud ARR, it's complex to model externally, noting the primary variable is a six-month maintenance credit. CEO Amit Walia confirmed CLAIRE GPT is consumed via IPUs but stated there are no current plans to break out its specific consumption metrics.

Koji Ikeda asked why Jamf maintained its full-year guidance despite commentary suggesting strong demand, questioning if it was due to conservatism amid macro uncertainty. He also inquired about the potential for a weakening U.S. dollar to act as an international demand driver.

Answer

CFO David Rudow responded that maintaining guidance is a prudent measure given the uncertain macro environment. Regarding foreign exchange, he explained that while Jamf's new system allows for billing in local currencies, the transition is gradual. Therefore, the immediate impact of a weaker dollar is a negative headwind on its international cost base rather than a significant benefit to top-line revenue.

Koji Ikeda inquired about the specific levers Jamf plans to use to reach its Rule of 40 target by the end of 2026 and asked for an update on confidence in security being a primary driver for ARPU growth.

Answer

CFO David Rudow stated the goal to exit 2026 at a Rule of 40 run rate will be achieved through a combination of revenue growth and continued margin expansion, highlighting the 1,100 basis point improvement over the last two years. CEO John Strosahl expressed high confidence in the security portfolio, noting that its capabilities are a significant differentiator and have been instrumental in winning management deals, such as with Taiwan's Ministry of Education.

Koji Ikeda from Bank of America asked about the potential opportunity arising from a legacy competitor's product reportedly nearing its end-of-life. He also sought confirmation that the guidance implies accelerating growth in the second half of the year and asked what pipeline indicators support this confidence.

Answer

CEO Jennifer Tejada expressed confidence in PagerDuty's differentiated platform for large enterprises, highlighting its ability to scale reliably and securely as a key advantage. CFO Howard Wilson confirmed the guidance implies a back-half growth acceleration. He attributed this confidence to improved pipeline velocity and quality, and the strong 12% year-over-year ARR growth from customers spending over $100,000, which validates the company's enterprise focus.

Koji Ikeda expressed concern about the compounding effect of deal deferrals and asked for the source of confidence in closing them. He also asked about balancing growth investments against the company's target operating model, which has nearly been reached.

Answer

CEO Jennifer Tejada noted some deferred deals have already closed and pointed to consistent performance in closing deals over $100k. She emphasized a focus on multiyear, multiproduct deals and improved sales execution. CFO Howard Wilson added that the Q1 pipeline for the next fiscal year is almost 50% higher year-over-year. Regarding the operating model, Tejada stated the focus is on reaccelerating growth, and Wilson confirmed they will balance growth with profitability, aiming to expand margins without sacrificing growth investments.

Koji Ikeda inquired about the high-level outlook for fiscal year 2026, considering current billings trends, expected second-half acceleration, and increased deal seasonality.

Answer

CEO Jennifer Tejada highlighted that a record number of multi-year deals reduces future renewal pressure. CFO Howard Wilson added that while specific FY26 guidance isn't available, they expect ARR growth to exit the year above 10%. He anticipates trailing 12-month billings growth will rise to approximately 10% in Q3 and that the enterprise-driven seasonality, with a heavier Q4, is likely to persist.

Koji Ikeda inquired how much of the revenue upside was driven by customers 'bursting' their ACV from adopting AI features and how Elastic is managing the long-term cost and value proposition for these customers.

Answer

CEO Ash Kulkarni clarified that the revenue strength was broad-based and not specifically correlated to AI-driven ACV bursts, as the AI area is still young. He emphasized that Elastic's strategy is to continuously add features, like binary quantization, that improve efficiency and lower costs over time. This approach, he argued, wins more workloads and is key to long-term success in the AI ecosystem.

Koji Ikeda of BofA Securities asked for a rating of the sales organization's recovery and questioned the implied Q4 exit growth rate. He also inquired if the large million-dollar GenAI deals were for specific projects, implying future potential.

Answer

CEO Ashutosh Kulkarni declined to give a rating but expressed confidence, citing that pipeline creation and progression have returned to normal levels. Incoming Interim CFO Eric Prengel noted the Q4 growth rate reflects the ongoing headwind from the Q1 commitment shortfall. Regarding GenAI deals, Ash Kulkarni confirmed they are for specific projects and represent growing customer commitments, which is a positive long-term indicator, though they are sold as part of the overall platform.

Koji Ikeda asked about the go-to-market strategy in international regions, inquiring if similar sales segmentation changes were implemented or planned there, and how learnings from the Americas might be applied.

Answer

CEO Ashutosh Kulkarni explained that the significant segmentation changes were specific to the Americas (excluding public sector) due to the scale and structure of the business there. He stated that international teams are organized by country and their existing structure was deemed effective, so no similar changes were made or planned. CFO and COO Janesh Moorjani added that while EMEA saw some deal pushouts from budget constraints, it was a lesser factor than the Americas execution issues.

Questioned the deceleration in ARR despite strong new deal commentary and asked if the recent Net Dollar Retention (NDR) rate represents a bottom for the metric.

Answer

The company explained that ARR is a point-in-time metric and strong Q3 bookings haven't fully monetized yet, creating a lag. They are confident in future growth based on other metrics like ACV and have more tools for 2025. They believe NDR has bottomed around 102-103%, with stabilizing churn and downgrade trends, and expect it to pick up in Q4 and accelerate in 2025.

Asked about the potential impact of a changing interest rate environment on demand and for details on the key levers to improve the Net Retention Rate (NRR) over the next year.

Answer

The company views its business as 'low beta' and robust, suggesting that macro pressure can even drive clients to their more cost-effective platform. NRR improvement is expected to come from product cross-sells (OEMS, managed services), increased wallet share with existing clients, pricing adjustments, and the roll-off of the negative impact from the CS/UBS merger.