Matthew VanVliet

Matthew VanVliet asked about the lackluster international performance in Q3, seeking clarification on specific reasons like holiday impact or sales capacity, and the outlook for Q4 and next fiscal year. He also questioned the impact of Joe and Terry's leadership on top-of-funnel demand and brand awareness.

Answer

Ramesh Srinivasan (President and CEO, Agilysys) clarified that there are no sales capacity issues and international sales fluctuations are due to reliance on larger ecosystem deals, despite a strong year overall. He noted that Joe Youssef and his team are successfully opening 'super big deals' not typically included in the pipeline, while the regular pipeline continues to grow.

Matthew VanVliet of Cantor inquired about the lackluster international sales performance in Q3, seeking specific reasons, the impact of the holiday season, and plans for sales capacity additions in local markets. He also asked about the impact of Joe and Terrie (sales leadership) on top-of-funnel demand and brand awareness for the fiscal 2027 outlook.

Answer

President and CEO Ramesh Srinivasan clarified there are no sales capacity issues, emphasizing a focus on sales productivity. He explained that international sales are currently reliant on larger ecosystem deals, leading to quarter-by-quarter fluctuations, but overall, fiscal 2026 is expected to be a very good year. He noted that sales leadership has been effective in opening 'super big deals' not typically included in the pipeline, while the 'singles, doubles, triples' pipeline remains steady.

Matthew VanVliet inquired about the continued international sales strength, seeking details on performance in Europe/EMEA versus APAC and whether the Marriott deal is creating a 'halo effect' in these markets.

Answer

Ramesh Srinivasan, President and CEO of Agilysys, emphasized that product improvements are the main driver, rather than a halo effect from any specific project. He highlighted record performance in EMEA, particularly the UK, and growing opportunities in APAC, expressing bullishness on international markets as a major growth engine. He also asked about the delivery team's capacity to manage backlog, to which Ramesh Srinivasan confirmed that bulk capacity increases were completed in the first half of the calendar year, and while steady expansion will continue, customer delays are the primary remaining challenge.

Matthew VanVliet inquired about the cross-sell opportunity within Book4Time's existing customer base, asking about the potential market size and the expected timing for these synergies to impact the model. He also asked how the successful integration of Book4Time might influence Agilysys's future M&A strategy and appetite for acquisitions.

Answer

CEO Ramesh Srinivasan stated that the cross-sell opportunity is significant, citing the company's 84% year-over-year growth in selling additional products to its own customer base as a successful precedent. He emphasized that the Book4Time team's strong customer relationships are a key asset. Regarding future M&A, Srinivasan confirmed that while the company has had success with acquisitions, its strategy will remain conservative, patient, and opportunistic, focusing on filling specific product gaps or expanding geographically rather than pursuing acquisitions more aggressively.

Matthew VanVliet asked about the product roadmap for AI Decisioning Studio, specifically if there's a strategy to move into the mid-market/lower enterprise or if a lighter-weight, lower-cost version is planned.

Answer

Bill Magnuson (CEO, Braze) framed the broader problem as AI-driven relevance optimization. While Decisioning Studio is enterprise-focused, he noted that other tools like Agent Console offer different starting points for deploying AI into workflows, even for rapid deployment and early experimentation. He highlighted the 'vibedecisioning.com' redirect to Agent Console as an example of providing on-ramps to advanced techniques for marketers across the spectrum.

Matthew VanVliet asked about the product roadmap for AI Decisioning Studio, specifically if there's a strategy to move into the mid-market or a lighter-weight, lower-cost version planned.

Answer

Bill Magnuson (CEO, Braze) framed the broader problem as 'AI-driven relevance optimization.' He suggested that other products like the Agent Console (which allows rapid deployment and experimentation, even for marketers) serve as on-ramps to advanced techniques. He hinted at 'vibedecisioning.com' forwarding to Agent Console, indicating a broader approach to individualized personalization beyond just the enterprise-focused Decisioning Studio.

Matthew VanVliet asked about sales execution, specifically how average deal sizes compared to expectations, whether sales cycles were prolonged or deals came in at smaller price points, and the average duration of sales reps' maturation and its influence on execution.

Answer

Co-founder and CEO Bill Magnuson stated that average deal sizes have shown some quarter-by-quarter noise but generally reflect stable productivity. He noted that inputs to sales productivity, average durations, and deal terms (annual vs. multiyear, payment terms) have remained fairly consistent, with no major trend lines to report.

Matthew VanVliet asked about the expected impact of the new free trial program on initial deal sizes and, more importantly, on the speed and scope of expansion within existing customers.

Answer

CEO Bill Magnuson stated that he does not expect a material change in average sale prices, as sandbox environments have been used in enterprise deals previously. He does expect the trial to help expand within existing customers more efficiently, citing positive proof points from freemium models on other features. He also highlighted ancillary benefits like improved usability and faster onboarding for all customers.

Matthew VanVliet of BTIG sought more detail on the drivers of EVERFI's underperformance, asking if it was due to customer downsizes, a lack of new deals, or outright logo churn. He also asked about the performance of the YourCause business.

Answer

CEO Mike Gianoni explained that EVERFI's weakness was a combination of softness in renewals and expansions, as well as a slowdown in new bookings, attributing it to a macro pullback in its market. He explicitly stated that the YourCause business is performing very well, growing organically, and has not been negatively impacted by EVERFI's challenges.

Matthew VanVliet inquired about sales linearity throughout the third quarter and into October, and whether there was any discernible impact on decision-making from the upcoming election.

Answer

CEO Lynn Moore stated that the company is not observing any slowdowns or hesitations in client decision-making due to the election or other macro factors, noting that most divisions are meeting or exceeding their sales plans. CFO Brian Miller added that sales linearity within quarters remains consistent with past trends and is not unusually back-end loaded.

Matthew VanVliet asked for an update on the services partner community and how Guidewire balances building capabilities internally versus cultivating its technology partner marketplace.

Answer

President & CRO John Mullen stated the partner plan is 'more of the same' but with a new focus on regional specificity in Europe and APAC. CEO Mike Rosenbaum explained the marketplace strategy is to create an open ecosystem that offers customers choice. He believes that as the cloud customer base grows, it will create a large opportunity for technology partners to integrate, which is beneficial for the entire ecosystem.

Matthew VanVliet of BTIG sought to understand the expected impact of new pricing and packaging initiatives on deal sizes and renewals. He also asked about the size and strategic rationale for creating a dedicated renewals team.

Answer

Founder and Co-CEO Ragy Thomas clarified that the pricing and packaging project is in its early stages and will not impact the current fiscal year. Co-CEO Trac Pham explained that the new renewals team was created to centralize and focus the renewal effort, which was previously distributed across various teams. He added that this investment, along with hiring more AEs, is already factored into the financial guidance.

Spencer, on for Matthew VanVliet of BTIG, asked how AI products are driving customer expansion, specifically whether it's through upsells to premium tiers or by facilitating cross-sells of other products.

Answer

CEO Eric Yuan explained that for core Workplace customers, the value added by AI Companion at no extra cost builds long-term trust. For premium services like Contact Center, AI Companion is a key differentiator that attracts new customers and justifies premium pricing tiers. He emphasized a dual strategy: adding value to the existing base for free while using advanced AI to drive adoption and monetization of new services.

Inquired about the focus of the R&D budget, potential M&A targets, and how the company might use AI/GenAI to enhance its offerings, particularly around verticalization.

Answer

R&D is focused on the core platform, talent solutions, and platform openness. M&A is opportunistic across many small categories around HCM. AI is currently being used most in the talent suite (e.g., job description generators) and they are working on proactive nudges and GenAI chat functionality to improve user workflows.

Inquired about the business development impact of the user conference and trends at the low end of the market.

Answer

The company noted the conference was a good lead generator for cross-selling and that they plan to grow it. They confirmed that the micro and small business segments are seeing slower growth and higher churn, a persistent trend, while the mid-market remains strong.