Matthew Kikkert

Matthew Kikkert of Stifel inquired about the recently announced CareCredit integration, specifically asking if the primary focus is to drive incremental payments attach rates, increase average payment volumes among existing customers, or achieve other strategic objectives. Matthew Kikkert also asked about Weave's expectations for growth rates across its various subverticals for the year 2026.

Answer

CFO Jason Christiansen explained that the CareCredit partnership opens another avenue to capture payment volumes that would otherwise flow through CareCredit directly. CEO Brett White added that this is a next step in Weave's payment strategy, evolving it into a financial solution that offers practices more tools for patient financing, making the payment product more attractive and increasing volume. Regarding growth rates, CFO Jason Christiansen stated that while specific growth rates for each vertical are not broken out, Weave anticipates strong growth across specialty medical and mid-market, with momentum continuing through these channels. CEO Brett White further elaborated that specialty medical is expected to be the strongest grower due to market opportunity, integration additions, and increased brand presence, while all verticals are anticipated to show solid growth, partly driven by the omnichannel AI Receptionist.

Matthew Kikkert asked about the strategic focus of the newly announced CareCredit integration, specifically whether it aims to drive incremental payments attach rates, increase average payments volumes across existing customers, or serve another primary objective. He also inquired about Weave's expectations for growth rates across its different subverticals for 2026.

Answer

CFO Jason Christiansen explained that the CareCredit partnership opens a new avenue to capture volumes that would otherwise flow through CareCredit, noting that the integration work is ongoing. CEO Brett White added that this is a step in Weave's payment strategy, expanding it to a financial solution with more tools for practices and patients, making the payment product more attractive and increasing volume. Regarding subvertical growth, Jason Christiansen stated that Weave anticipates strong growth across its growth vectors, including specialty medical and mid-market, without breaking out specific rates. Brett White further elaborated that specialty medical is expected to be the strongest grower due to market opportunity, integration efforts, and marketing spend, with solid growth anticipated across all verticals, partly driven by the omni-channel AI Receptionist.

Matthew Kikkert, on for Parker Lane, asked for an update on the TrueLark acquisition, specifically regarding the integration of the team, assets, go-to-market strategy, and any early customer feedback. He also questioned the impact of the enterprise push on Customer Acquisition Cost (CAC) and future opportunities for sales and marketing leverage.

Answer

CEO Brett White detailed that the TrueLark go-to-market integration is underway for multi-location clients, with plans to offer it to the installed base in Q4 and new single-location prospects in Q1 2026, pending the development of a unified inbox. He noted that the mid-market sales motion has a favorable CAC. CFO Jason Christensen added that the net revenue retention for multi-location logos is over 100%, highlighting the model's scalability and long-term leverage.

Matthew Kikkert inquired about the specific levers SPS Commerce plans to pull to achieve its targeted EBITDA margin expansion in 2026, and whether any specific verticals or vendor sizes are showing bright spots amidst delays in the enablement pipeline.

Answer

CFO Kim Nelson explained that EBITDA margin expansion in 2026 will primarily come from gross margin improvements, driven by past investments in customer experience leading to efficiencies. She also noted opportunities in sales and marketing and G&A. CEO Chad Collins stated that enablement pipeline delays are fairly consistent across all retail segments, with some minor favorable dynamics from food safety regulations in food-related areas.

Matthew Kikkert asked about the specific levers SPS Commerce plans to pull to achieve the targeted EBITDA margin expansion in 2026. He also inquired whether the delays in the enablement pipeline were observed across specific verticals or vendor sizes, or if they were a broad-based trend.

Answer

CFO Kim Nelson explained that EBITDA margin expansion in 2026 will largely be a continuation of 2025 dynamics, with a meaningful component coming from gross margin expansion due to past investments in customer experience leading to efficiencies. She also noted opportunities in sales and marketing and G&A, while R&D spend as a percentage of revenue is considered appropriate. CEO Chad Collins stated that delays in the enablement pipeline were pretty consistent across all broad definitions of retail, including mass merchant, grocery, and distribution, with some favorable dynamics in food-related areas due to safety regulations.

Matthew Kikkert asked if the 10%-12% underlying growth for the payments and transaction segment next year is viewed as a run rate coming out of 2026, and about the levers for midterm growth in that segment.

Answer

Brian Miller, CFO, confirmed that the 10%-12% range is in line with the midterm growth rate (10%-13%) discussed at the 2023 investor day, and is expected to be the run rate going forward. This growth is driven by expanding integrated payments within the existing software customer base, higher transaction volumes from online services, and increasing contributions from disbursements.

Matthew Kikkert inquired if the 10%-12% underlying growth for the payments and transaction segment next year is viewed as a run rate coming out of 2026, and asked about the key levers for midterm growth in that segment.

Answer

CFO Brian Miller confirmed that the 10%-12% range aligns with the 10%-13% midterm growth rate previously discussed for the transaction business. He explained that this growth is driven by expanding integrated payments within the existing software customer base, higher transaction volumes from increased online service adoption, adding disbursements to the portfolio, and providing software products under transaction-based arrangements.

Matthew Kikkert asked for Q2's perspective on the current banking M&A landscape and its impact on 2026 guidance, as well as details on internal AI efficiencies and their contribution to the 2026 EBITDA expansion target.

Answer

CEO Matt Flake noted that M&A activity is picking up, with Q2 historically being the surviving entity in 93% of transactions, positioning them well. CFO Jonathan Price added that known M&A deals are factored into guidance, with hypothetical M&A representing potential upside. Regarding AI efficiencies, Matt Flake stated that all departments are using AI tools to drive efficiencies. Jonathan Price clarified that 2026-2027 margin expansion targets have conviction regardless of AI, but AI efficiencies are expected to have a meaningful impact on the path to the 2030 target.

Matthew Kikkert asked about Blackbaud's capital allocation strategy, specifically how much of the free cash flow through 2030 would be allocated to strategic M&A in the AI landscape, given the commitment to share repurchases. He also inquired about a new leverage target, following the reduction to 2.5x at the end of 2025.

Answer

Anthony Boor, EVP and CFO, stated that share repurchases remain the top capital allocation priority, but tuck-in M&A is still on the table for small, innovative solutions. Michael Gianoni, CEO, President, and Vice Chairman, added that while no specific leverage target is shared, the company expects to continue delevering below 2.5x by the end of 2026, alongside continued share repurchases.

Matthew Kikkert inquired about the allocation of free cash flow, specifically how much focus will be placed on strategic M&A in the AI landscape versus the stated 50%+ for share repurchases through 2030. He also asked if Blackbaud has a new leverage target in mind, given the reduction to 2.5x.

Answer

CFO Anthony Boor stated that share repurchase remains the top capital allocation priority, but tuck-in M&A, especially for small, founder-led, innovative solutions, is still very much on the table, as Blackbaud has capacity for both. He added that while no specific leverage target is shared, the company expects to continue delevering below 2.5x by the end of 2026, alongside continued share repurchases.

Matthew Kikkert (Stifel) asked about the structural drivers behind Blackbaud's continued outperformance in transactional revenue and the confidence in a higher growth rate for this stream, including any viral giving events in Q3 or expected in Q4. He also sought insight into the primary market expansion levers for achieving Rule 45 and the expected ROI timeline and magnitude from the India office investment.

Answer

Mike Gianoni, Blackbaud's CEO, President, and Vice Chairman, attributed transactional revenue strength to winning new business, increasing volume across all three platforms (JustGiving, donation processing, tuition management), and strong fundamentals, without any viral giving events in Q3. He expressed confidence in the future trajectory of these platforms. Regarding Rule 45, Gianoni outlined a strategy of maintaining mid-single-digit+ revenue growth, higher EBITDA, and double-digit EPS, driven by cost takeout, infrastructure improvements, internal AI for productivity, new solutions like agentic AI, and a continued focus on share repurchases, which have reduced outstanding shares by 16% (10% net) over two years.

Matthew Kikkert asked about the structural drivers behind Blackbaud's continued transactional revenue outperformance and higher growth rate, including any viral giving events in Q3 or expected in Q4. He also sought insight into primary market expansion levers for achieving Rule 45 and the expected ROI timeline for the India office investment.

Answer

Mike Gianoni, Blackbaud's CEO, President, and Vice Chairman, attributed transactional revenue strength to winning new business, increasing volume across all three platforms, and strong fundamentals, with no viral events in Q3. He outlined the path to Rule 45 through mid-single-digit+ organic revenue growth, higher EBITDA, double-digit EPS, cost takeout opportunities, internal AI productivity, new solutions like agentic AI, and aggressive share repurchases (16% of outstanding shares repurchased in the past two years).

Matthew Kikkert from Stifel inquired about the progress of the company's focus on acquiring net new logos in Q1 and the outlook for the international business, including JustGiving and YourCause.

Answer

CEO Michael Gianoni reported that new logo bookings were 'up substantially' in Q1 with a strong pipeline. He also noted solid performance in international markets like Asia-Pacific and Europe, highlighting the continued success of JustGiving and significant future growth potential for the corporate-focused YourCause platform.

Matthew Kikkert of Stifel Financial Corp. inquired about the strategic rationale for the Quanti acquisition and asked about the key levers for reaching the long-term subscription gross margin target.

Answer

CEO Mike Rosenbaum described the Quanti acquisition as a move to provide customers with advanced pricing and rating design capabilities, enhancing agility. CFO Jeff Cooper stated that reaching the 80% long-term subscription gross margin target will be achieved through continued platform automation and the benefits of increased scale.

Matthew Kikkert from Stifel Financial inquired about the incremental functionality from the Quanti acquisition and the steps needed to reach the 80% long-term subscription gross margin target.

Answer

CEO Mike Rosenbaum explained that Quanti's pricing and rating technology provides an actuarial workbench, adding significant agility for customers. CFO Jeff Cooper stated that reaching the 80% gross margin target requires no "heroic steps," but will be achieved through continued platform automation and increased scale.

Matthew Kikkert of Stifel inquired about the continued traction of selling DealCloud into the legal vertical and the pipeline for that motion. He also asked how to think about the incremental spending on AI features in relation to long-term margin expansion targets.

Answer

Chairman and CEO John Hall confirmed strong demand for DealCloud in the legal sector, driven by firms' needs for cross-selling and integrating lateral hires. Regarding AI spend, he explained that Intapp's 'applied AI' strategy leverages existing technologies rather than building models from scratch, meaning it does not involve significant CapEx and fits within their existing margin expansion framework.

Matthew Kikkert of Stifel Financial Corp. questioned the split between new and expansion customers in the 2025 guidance and asked which go-to-market changes were contributing to recent positive booking trends.

Answer

CFO Stefan Schulz stated that the mix of new versus existing customers is approximately 40% new and 60% existing, a balance they expect to continue. President and CEO Andres Reiner explained that the positive booking trends are a result of improved sales execution, including better rep productivity, shorter sales cycles, improved quarterly linearity, and more effective demand generation from marketing.

Matthew Kikkert inquired about the revenue guidance split between new and existing customers and the go-to-market changes.

Answer

CFO Stefan Schulz indicated a roughly 40/60 split between new and existing customers. CEO Andres Reiner highlighted improved sales execution and marketing functions.

Matthew Kikkert, on for Parker Lane, inquired about the incremental value of the Zest AI partnership, the company's broader fraud product strategy for 2025, and which market areas MeridianLink might target for M&A.

Answer

Chief Executive Officer Nicolaas Vlok described Zest AI as a foundational partner providing deep AI-driven decisioning capabilities integrated into the platform. Regarding fraud, he noted high customer interest and ongoing investment in partnerships to expand fraud detection to new account onboarding. For M&A, Vlok stated the focus is on tuck-in acquisitions that expand the platform's breadth and depth, as well as opportunities in near-adjacencies, to meet customer demand for vendor consolidation.

Matthew Kikkert, on behalf of Parker Lane, asked if the recent leadership changes would alter the go-to-market strategy and questioned the drivers behind the recent downtick in customer accounts.

Answer

CEO Nicolaas Vlok stated that no changes to the go-to-market strategy are anticipated, highlighting that the new President's role now covers the entire commercial journey to drive efficiency. President and CFO Larry Katz explained that customer churn is slowing and is concentrated among smaller clients, and advised focusing on the rising ARR per customer, which reflects the company's expansion strategy and focus on larger clients.

Asked about the specific drivers for the guided EBITDA margin expansion in the second half of the year and questioned the high percentage of new fund launches in the quarter's wins, asking if that mix is expected to change.

Answer

The company attributed future margin expansion to broad-based efficiencies, highlighting a specific initiative around client 'self-service' tools and scale benefits in G&A. Regarding the client mix, they explained that many 'launches' are effectively conversions from competitors and that on an ARR basis, the mix is already heavily skewed towards larger conversion deals, a trend they expect to continue.

Asked for the specific drivers behind the guided increase in net dollar retention (NDR) to 106-107% and whether the strong quarter for new customer wins was due to a change in go-to-market strategy or external factors.

Answer

The improved NDR is driven by a recovery in net organic growth (fewer downgrades, more seat additions) and a decrease in churn rates from their mid-2023 peak. The strong customer wins were not due to a change in strategy but rather the consistent execution of a purposeful global strategy, diversifying geographically and winning a balanced mix of new launches and conversions.