Raimo Lenschow

Raimo Lenschow asked about Atlassian's strategy regarding Data Center (DC) price increases and the gap to Jira Cloud pricing, and whether further actions could accelerate the migration journey. He also followed up on the 20% revenue growth CAGR.

Answer

Joe Binns (CFO, Atlassian) explained that cloud pricing reflects R&D investment and value delivery, with headroom for further increases through packaging or list prices. He stated that DC price changes would be deliberate to incentivize cloud upgrades. He then reiterated confidence in the midterm outlook of 20%+ compounded annual revenue growth and 25%+ non-GAAP operating margin through FY 2027, maintaining a conservative approach to short-term guidance.

Raimo Lenschow asked about the impact of Data Center (DC) price increases on the gap to Jira Cloud, potential Server incentives for migration, and sought clarification on the reiterated 20% revenue growth CAGR.

Answer

CFO Joe Binns explained that Atlassian's significant R&D investment and continuous innovation allow for price increases commensurate with value, noting that current prices remain below competitors. He stated that DC price changes are part of a deliberate strategy to incentivize Cloud upgrades. He also confirmed no change to the midterm outlook, reiterating the 20%+ compounded annual revenue growth through FY2027 and the 25%+ non-GAAP operating margin commitment for FY2027, while maintaining a conservative approach to short-term FY2026 guidance.

Raimo Lenschow asked how investors should think about potential changes to the go-to-market strategy for the upcoming fiscal year, particularly given the new CRO's enterprise background from SAP.

Answer

CEO Mike Cannon-Brookes responded that Atlassian's go-to-market is in a state of constant evolution to meet changing customer needs. He emphasized that while the new CRO brings valuable enterprise experience, the company continues to learn and adapt across its entire model, from the high-velocity, frictionless sales to strategic enterprise accounts, viewing it as a continual learning process.

Raimo Lenschow inquired about the breadth of new CEO Ayman Antoun's mandate regarding further divestments and focusing on the core business, and also asked for insights into constant currency bookings performance given some deceleration in reported growth numbers.

Answer

Executive Chair and Chief Strategy Officer Tom Jenkins stated that Ayman Antoun's mandate aligns strongly with the board's strategy for portfolio shaping and core business focus. Interim CEO James McGourlay noted a good quarter with strong license bookings, emphasizing that deals can shift between quarters in an annual business cycle, and expressed excitement for the year ahead.

Raimo Lenschow of Barclays inquired about the current end-market demand and customer behavior given economic uncertainties, and asked for details on the operational and pricing factors driving the expected improvement in the maintenance business decline rate.

Answer

CEO Mark J. Barrenechea explained that global volatility is driving demand for sovereign cloud and on-premise solutions, creating a net positive tailwind. President & CCO Paul Duggan detailed that the maintenance business improvement stems from strong core operating metrics like higher renewal rates and price adjustments, new offerings like Advanced Customer Services (ACS), and overcoming prior one-time setbacks.

Raimo Lenschow asked for clarification on the Q3 performance miss relative to peers, questioning if specific vertical or geographic exposures were to blame, and inquired about new CFO Chadwick Westlake's top priorities.

Answer

CEO Mark Barrenechea attributed the performance miss to a $40-$50 million demand disruption, primarily in bookings, driven by auto tariff announcements impacting the auto, materials, energy, and U.S. government verticals. He stressed that the company successfully managed controllable areas like EBITDA and cash flow. CFO Chadwick Westlake outlined his three main priorities as maximizing capital allocation, simplifying guidance for greater transparency, and actively listening to investors and teammates.

Raimo Lenschow inquired about the current economic conditions across different regions and OpenText's competitive positioning in the ITOM market against players like ServiceNow.

Answer

CEO and CTO Mark Barrenechea stated that while Europe presents growth challenges, OpenText is well-positioned in strategic industries. He highlighted pro-growth initiatives in the U.S. as a positive factor. Regarding ITOM, Barrenechea explained that OpenText's strategy is to outperform by combining its observability and service management capabilities with its core strengths in security and content management, creating a comprehensive value proposition beyond traditional IT workflows.

Raimo Lenschow inquired about the key factors behind the Q4 financial results, specifically whether the license revenue decline was due to macro pressures or internal events, and asked for the drivers of the company's projected multi-year margin expansion.

Answer

CEO and CTO Mark J. Barrenechea clarified that the Q4 license performance was not macro-related but a result of the ongoing license-to-cloud transition and significant internal focus on two strategic programs: the AMC divestiture and business optimization planning. He stated that the path to higher margins involves increased revenue, talent and location optimization, improved cloud margins from automation like Titanium X, internal AI deployment for efficiency, and a greater mix of high-margin SaaS workloads.

Raimo Lenschow inquired about Lightspeed's software growth trajectory, considering recent pricing changes and the strategic shift to annual contracts, and how this impacts the conceptual medium-term growth outlook. He also asked about the strategy for managing the 'efficiency market' portfolio, which constitutes one-third of the business, and its expected evolution.

Answer

CEO Dax Dasilva explained that software growth was impacted by lapping price increases and seasonality, but noted that growth engines achieved 13% software growth. He emphasized the positive long-term impact of shifting to annual contracts and the acceleration of cross-sell and upsell motions for new modules. For the efficiency portfolio, Mr. Dasilva stated the goal is to maintain the revenue base by adding value through financial services (payments and capital) and ensuring customer satisfaction, contributing to overall net positive location growth.

Raimo Lenschow inquired about Lightspeed's strategy for managing and evolving its 'efficiency portfolio' (non-growth engine businesses) to maintain balance and overall growth.

Answer

CEO Dax Dasilva stated that the efficiency portfolio has been a strong performer, meeting and exceeding internal targets with increased gross profit. The strategy involves keeping these customers satisfied, adding value through financial services (payments and capital), and serving them effectively while accelerating the growth portfolio to achieve net positive overall location growth for the company.

Raimo Lenschow from Barclays followed up on payments penetration, asking how to model its progression, particularly around the timing of non-compete agreements rolling off. He also asked how Lightspeed and its merchants should adapt to changes driven by generative AI.

Answer

CFO Asha Bakshani advised modeling a gradual, quarter-to-quarter improvement in payments penetration rather than expecting a large step-change from non-competes. Founder and CEO Dax Dasilva reiterated that Lightspeed's AI strategy focuses on saving merchants time with tools for website generation, menu configuration, and performance benchmarking, enabling them to focus on high-value business activities.

Raimo Lenschow inquired about the company's planning assumptions for its non-focused 'efficiency markets.' He also asked why the company is only now scaling its outbound sales force to 150 reps and why it isn't hiring even more, given their effectiveness.

Answer

CFO Asha Bakshani explained that non-core markets are being run for efficiency and profitability, with growth coming from net retention via payments and capital adoption. President J.D. Saint-Martin noted that fiscal 2025 was the first year of at-scale outbound sales, and its success prompted the decision to triple the team. The hiring is capped at 150 for now to consciously manage the approximately six-month ramp time required for new reps to reach full productivity.

Raimo Lenschow requested a breakdown of the drivers behind the software revenue reacceleration, specifically the contribution from pricing versus customer engagement, and asked about the planned cadence for the new share repurchase program.

Answer

President JD Saint-Martin attributed the 9% software growth to a combination of product innovation (new modules), a focus on larger customers via outbound sales, and strategic price adjustments. CFO Asha Bakshani stated the company would immediately execute the remaining $100 million of its current buyback authorization and would continue to repurchase shares under the new $300 million authorization throughout fiscal 2026.

Raimo Lenschow asked about the CPU side of Azure, operational changes, and how clients realizing the importance of cloud for proper AI is driving momentum in cloud transitions.

Answer

Satya Nadella (Chairman and CEO) explained that AI workloads require significant CPU compute and storage, not just AI accelerators. He confirmed ongoing cloud migrations, citing SQL Server's growth as an IaaS service in Azure, emphasizing the need to balance commercial cloud with AI cloud for client workloads.

Raimo Lenschow inquired about the CPU side of Azure, recent operational changes, and how clients' realization of the necessity of cloud for effective AI is driving momentum in cloud transitions.

Answer

CEO Satya Nadella clarified that AI workloads require both AI accelerators and general compute (CPUs and storage), as agents often spawn containers that run on compute resources. He confirmed that cloud migrations are ongoing, citing the growth of SQL Server as an IaaS service in Azure. Nadella emphasized the need to balance Microsoft's commercial cloud offerings with its AI cloud infrastructure to meet client demands for all necessary elements in their deployment regions.

Raimo Lenschow of Barclays asked about customer conversations regarding the evolution of Copilot, noting the growing understanding that it is a starting point for a broader journey involving data and autonomous agents.

Answer

CEO Satya Nadella agreed, confirming that Copilot is evolving beyond simple chat interfaces to spawn asynchronous applications and agents like 'analyst' and 'researcher'. He emphasized that the UI remains critical for instructing and monitoring these agents, citing the GitHub Copilot code review agent as an example of how different system components are being leveraged.

Raimo Lenschow from Barclays asked about the customer realization that Copilot is a starting point for a broader opportunity involving data and autonomous agents.

Answer

CEO Satya Nadella agreed, stating that Copilot is evolving from a simple chat interface to a platform for spawning asynchronous work via agents. He emphasized that the user interface remains critical for instructing and monitoring these agents, using the GitHub Copilot code review agent as an example of this expanding, system-level interaction.

Raimo Lenschow of Barclays asked about customer conversations regarding the evolution from using Copilot as a starting point to leveraging the broader platform capabilities around data and autonomous agents.

Answer

CEO Satya Nadella confirmed this trend, explaining that usage is moving beyond simple chat to spawning asynchronous agentic applications. He emphasized that the UI remains critical for instructing and monitoring these agents, citing the GitHub Copilot code review agent as an example of how these tools are becoming deeply integrated into workflows.

Raimo Lenschow of Barclays asked for Satya Nadella's perspective on the evolution of AI productization, specifically the journey from Copilots to agents and what might come next.

Answer

CEO Satya Nadella outlined Microsoft's integrated system: Copilot serves as the UI for AI, Copilot Studio allows customers to extend Copilot by building agents, and these can include autonomous agents that work independently but delegate back to Copilot for human input. He described this as a complete system for business transformation, with all underlying components also available as building block services in Azure.

Raimo Lenschow inquired about the drivers behind Braze's growing momentum in competitive takeaways from legacy platforms, specifically if it's due to AI adoption or technical obsolescence. He also asked about the inflection point for dollar-based net retention (NRR).

Answer

Bill Magnuson (CEO, Braze) attributed the momentum to consolidation among subscale players, stagnation of enterprise competitors, Braze's scale and agility in AI innovation (e.g., ChatGPT SDK), and a shift in customer conversations from 'if' to 'when' regarding platform transitions. Isabelle Winkles (CFO, Braze) clarified that in-quarter organic dollar-based net retention continued to increase, stabilizing in the 107% range, slightly above Q2, due to mitigation efforts.

Raimo Lenschow inquired about the dollar-based net retention (NRR) metric, noting it's lagging but asking about the inflection point given intra-quarter improvements.

Answer

Isabelle Winkles (CFO, Braze) clarified that the in-quarter organic dollar-based net retention continued to increase, moving from slightly below 107% in Q1 to slightly above in Q2, and further above the Q2 number in Q3. This indicates a stabilization trend over the last three quarters.

Raimo Lenschow inquired about the impact of the new AI world on customer understanding of Braze's offering and changes in client communication behavior, and how this strengthens Braze's market position. Lenschow also asked about the trajectory and factors influencing the dollar-based net retention rate (NRR) recovery, especially with OfferFit as a cross-sell option.

Answer

Co-founder and CEO Bill Magnuson explained that Braze's outcome- and consumption-oriented pricing and design for small teams to achieve massive scale align well with the AI-native software world, increasing the scope of automated decision-making. He emphasized that AI helps bridge the gap between the promise and reality of sophisticated automation, making Braze's differentiation more accessible. CFO Isabelle Winkles noted that moderating downsell activity and a strong demand environment, coupled with OfferFit's cross-sell potential, are positive factors for NRR reacceleration, though no specific timeline was provided.

Raimo Lenschow asked CEO Sridhar Ramaswamy about the impact of 'Zero Copy' data sharing on Snowflake, specifically whether it drives more adoption or affects monetization, given its increasing prevalence among vendors in the ecosystem.

Answer

CEO Sridhar Ramaswamy explained that Zero Copy agreements, often arising from SaaS vendors' need to share and monetize data, are a win-win for Snowflake. He stated that these agreements drive Snowflake's mission to be central to customers' data needs, simplify data collaboration with partners like ServiceNow, Salesforce, SAP, and Workday, and enhance the value derived from data through agentic AI, ultimately providing customers with a unified view of their data.

Raimo Lenschow asked Sridhar Ramaswamy about the impact of 'Zero Copy' data sharing on Snowflake, specifically whether it drives more adoption or affects monetization, and how it enhances Snowflake's position within the broader ecosystem.

Answer

Sridhar Ramaswamy, CEO, described Zero Copy as a 'win-win' for SaaS vendors and Snowflake, facilitating data sharing and product creation. He stated that these agreements (e.g., with ServiceNow, Salesforce, SAP, Workday) advance Snowflake's mission to be central to customer data needs, making data collaboration smoother and enhancing the value derived from agentic AI.

Raimo Lenschow of Barclays asked about the strong new customer additions, specifically seeking to understand if the European go-to-market reorganization into 'hunters and farmers' is already contributing to the momentum.

Answer

CFO Mike Scarpelli confirmed that while Europe is developing and contributing, the bulk of new customer additions are still coming from the U.S., where the new sales motion was established first. He noted that Snowflake is replicating this successful model in EMEA and APJ and expects it to yield positive results as it matures in those regions.

Raimo Lenschow of Barclays inquired about how Snowpark adoption is affecting customer data architecture choices, specifically regarding vendor consolidation versus multi-system environments. He also asked about the strategy for share buybacks.

Answer

CEO Sridhar Ramaswamy stated that Snowflake acknowledges and works with complex customer ecosystems, but sees an opportunity in customers' desire to consolidate tools for simplicity. EVP of Product Christian Kleinerman added that investments in open formats like Iceberg support open architectures. Regarding buybacks, CFO Michael Scarpelli noted they will be evaluated quarterly and are viewed opportunistically, with the full authorization expected to be used by 2027.

Raimo Lenschow asked how Snowflake thinks about product adjacencies, specifically mentioning streaming, and where it chooses to build versus partner. He also questioned how conservative the fiscal 2026 guidance is compared to the previous year's, considering economic factors and the prior CEO change.

Answer

CEO Sridhar Ramaswamy identified streaming and ingestion as critical areas where Snowflake needs a strong native offering, alongside new areas like Snowflake Intelligence. EVP of Product Christian Kleinerman affirmed they will continue to partner with companies like Confluent. Regarding guidance, CFO Mike Scarpelli stated the guidance is 'appropriate' and that given the company's scale, a 3% beat should be considered significant, expressing confidence in the forecast for the quarter and the year.

Raimo Lenschow of Barclays asked about the strategy behind the Datavolo acquisition and Snowflake's evolving role in the ETL market. He also questioned whether the strong quarterly performance was driven by better execution or an improving economy.

Answer

CEO Sridhar Ramaswamy positioned the Datavolo acquisition as a key step to help customers act on all their data, especially unstructured data in cloud storage, by providing extensive connectivity. He noted the market is large enough for both Snowflake and its partners. CFO Mike Scarpelli attributed the strong results primarily to improved go-to-market execution, describing the economic environment as stable and similar to the previous quarter.

Raimo Lenschow inquired about the factors behind the better-than-expected gross margins and Snowflake's evolving position within the Iceberg ecosystem, particularly after a competitor's acquisition of Tabular.

Answer

CFO Mike Scarpelli explained that margins were slightly better due to delays in some GPU deployments but affirmed the full-year guidance of 75%. CEO Sridhar Ramaswamy asserted the Tabular acquisition validates Snowflake's strategy of betting on Iceberg as an interoperable standard and stated that Snowflake will continue to play a significant role in shaping the open-source project.

Raimo Lenschow inquired about Salesforce's strategy for expanding its sales representative capacity, including the ramping process for new reps and expectations for their productivity.

Answer

Chief Revenue Officer Miguel Milano credited CEO Marc Benioff's foresight for the investment in capacity and enablement, noting a 20% increase in capacity, with 15% ramped by year-end. He highlighted that the hard work of ramping AEs (typically 6-12 months) was done as demand surged, leading to healthy double-digit growth in Q3 pipeline generation and open pipeline for next year. Milano emphasized that Agentforce and Data Cloud offer exponential monetization opportunities, with some customer AOVs doubling or tripling.

Raimo Lenschow asked about the strength in the Platform segment and how the combined portfolio of Tableau, MuleSoft, and the pending Informatica acquisition will strategically enhance the company's AI agent capabilities.

Answer

CEO Marc Benioff highlighted the deep integration of Tableau into the Data Cloud and metadata platform. President and Chief Engineering Officer Srini Tallapragada elaborated that this combination creates a trusted, enterprise-grade data platform essential for AI agents, with MuleSoft for connectivity, Data Cloud for unification, Tableau for insights, and Informatica to accelerate the overall data strategy.

Raimo Lenschow of Barclays asked how the combined portfolio of Tableau, MuleSoft, and the pending Informatica acquisition will strategically enhance Salesforce's AI and agentic capabilities.

Answer

Chair and CEO Marc Benioff highlighted Tableau's deep integration into the core platform. President and Chief Engineering Officer Srini Tallapragada elaborated that an effective agentic strategy relies on a strong data strategy. He explained that MuleSoft, Data Cloud, Tableau, and Informatica will collectively provide the trusted, enterprise-grade data platform necessary for customers to deploy reliable AI agents at scale.

Raimo Lenschow asked for the strategic thinking behind combining the Chief Operating Officer and Chief Financial Officer roles for the incoming executive, Robin Washington.

Answer

Chair and CEO Marc Benioff described the combined COFO role as a 'perfect match' that creates significant leverage by uniting finance and operations. He noted he was inspired by a similar structure at another company and successfully recruited Robin Washington from the board. Incoming COFO Robin Washington added her excitement for the opportunity.

Raimo Lenschow from Barclays inquired about the customer conversations around Agentforce pricing and how Salesforce plans to share in the value it creates for clients.

Answer

COO Brian Millham stated the pricing is a usage-based model at '$2 a conversation,' which offers high value. CEO Marc Benioff elaborated with a personal healthcare anecdote, contrasting a hypothetical $100 human-led call with a $1.50 agent-led interaction to illustrate the immense cost savings and productivity gains for customers. Millham added that customers understand their labor costs, which simplifies pricing discussions, and pointed to online ROI calculators available to them.

Raimo Lenschow asked about the time frame for professional services to translate into subscription revenue growth and Anthony Coletta's philosophy for communicating financial guidance going forward.

Answer

Rory Read, President and CEO, detailed initiatives to improve services and support, including moving internal support to Sprinklr, implementing new technology for project tracking, and expanding partner relationships, expecting these to mature by early spring to mid-summer next year. Anthony Coletta, CFO, stated his guidance philosophy will focus on realism, transparency, and delivery, emphasizing consistency and focusing on key metrics like subscription revenue, CRPO quality, net dollar expansion, operating margin, and free cash flow generation.

Raimo Lenschow asked about the timeframe for Sprinklr's services organization's increased handholding and project driving to translate into improved subscription revenue growth. He also asked new CFO Anthony Coletta about his initial thoughts on communication strategy, including guidance philosophy and key metrics beyond subscription revenue.

Answer

CEO Rory Read detailed ongoing transformation in services and support, including moving internal support onto Sprinklr's platform (Q4/Q1 next year), implementing new technology for tracking projects and skills, expanding partner relationships, and standardizing implementation runbooks. He expects these initiatives to yield results by early spring to mid-summer next year. CFO Anthony Coletta outlined a guidance philosophy focused on realism, transparency, and delivering on commitments, emphasizing consistency. Key metrics will include subscription revenue, CRPO quality, platform growth, net dollar expansion (especially for $1M+ customers), operating margin progress, and free cash flow generation.

Raimo Lenschow asked for Sprinklr's vision on how AI will disrupt the CCaaS space and how the new Business Management System (BMS) will be used across the organization.

Answer

President, CEO & Director, Rory Read, expressed enthusiasm for the AI disruption in CCaaS, stating it "opened the door for Sprinklr" by shifting focus to unified customer experiences, which plays to Sprinklr's platform strengths. He stressed the need to mature the company's processes to capitalize on this. CFO Manish Sarin added that the BMS is a broad, cross-functional system, not just for sales, designed to give everyone a 360-degree view of the business to improve teamwork and execution.

Raimo Lenschow asked about the planned management structure and team changes, noting that many of the proposed operational improvements are standard for a mature company. He also questioned the source of confidence in the guided Q4 billings reacceleration and the linkage between billings and future subscription growth.

Answer

President and CEO Rory Read agreed the planned changes are "basic blocking and tackling" for a mature SaaS company and that he will build a team capable of scaling the business, pointing to his past transformations as a playbook. CFO Manish Sarin explained that the Q4 billings reacceleration is a consistent seasonal pattern observed over the last few years, where Q4 is a seasonally strong quarter following a weaker Q3.

Raimo Lenschow asked Bill Staples if GitLab could implement any SKU-related strategies to better address the persistent SMB weakness, or if the company primarily needs to await an improvement in overall market sentiment for this segment.

Answer

Bill Staples, CEO, GitLab, clarified that SMB represents a small portion of revenue and is not a primary go-to-market focus. He emphasized their strategy of offering a robust free product (open-source packages and GitLab.com's free tier) and sees the Duo Agent Platform as a future opportunity to convert free SMB users into paying customers, given their willingness to invest in AI.

Raimo Lenschow asked about GitLab's strategy to address the persistent SMB weakness. He questioned whether the company could implement SKU adjustments or other initiatives to better serve this market, or if it primarily needs to await an improvement in overall market sentiment.

Answer

Bill Staples, CEO, GitLab, clarified that SMB is a small share of overall revenue and not a primary optimization target for go-to-market strategy. He noted the importance of driving awareness and early adoption through a strong free product (open-source packages and free tier on GitLab.com). He believes Duo Agent Platform could offer new opportunities to convert free SMB customers into paid engagements by delivering AI on top of free products.

Raimo Lenschow of Barclays asked CJ Desai about strategies to increase developer engagement with MongoDB on the West Coast, particularly against the Postgres narrative in the valley. He also asked Mike Berry if non-Atlas numbers for next year should be anchored on ARR performance.

Answer

Dev Ittycheria, Board Member, explained past efforts to reinvest in the Bay Area, including increased sales presence, marketing, startup community engagement, and hackathons. CJ Desai, President and CEO, added that his personal time and network on the West Coast, along with the relaunch of .local in San Francisco, will boost developer mind share. Mike Berry, CFO, advised anchoring non-Atlas revenue growth for next year in the mid-to-low single digits, based on the full-year fiscal 2026 revenue growth of about 4%.

Raimo Lenschow asked CJ Desai about strategies to enhance developer engagement with MongoDB, particularly on the West Coast, to counter the narrative often favoring Postgres in the Valley. He also asked Mike Berry for guidance on anchoring fiscal 2027 numbers, specifically for non-Atlas business, given the absence of multi-year deal benefits.

Answer

Dev Ittycheria, Board Member, discussed the 'Reclaim the Bay' initiative, focusing on reinvestment in the Bay Area, supporting startups, and engaging the venture community. CJ Desai, President and CEO, added his personal involvement, leveraging his network, and the upcoming .local event in San Francisco to boost developer mindshare. Mike Berry, CFO, advised that for fiscal 2027, non-Atlas revenue growth should be considered in the mid-to-low single-digit range, aligning with the full-year fiscal 2026 performance of approximately 4%.

Raimo Lenschow asked for clarification on what is driving the acceleration in the self-service channel despite the company's strategic move upmarket, and also inquired about the renewal cohorts for the non-Atlas business, particularly for Q3.

Answer

President & CEO Dev Ittycheria explained that the self-serve success is due to a data-driven, experimental approach, including new motions to attract SQL developers to the MongoDB platform. CFO Mike Berry addressed the non-Atlas question, stating that the outlook for next year's Q3 depends on this year's Q3 performance and that the main headwind for the upcoming quarter is from multiyear deals.

Raimo Lenschow from Barclays asked for MongoDB's perspective on competitors like Snowflake and Databricks acquiring Postgres companies and questioned new CFO Mike Berry on his due diligence regarding the company's profitability potential.

Answer

CEO Dev Ittycheria asserted that competitors' moves validate the strategic importance of the operational database market for AI and argued their bolt-on JSON support is superficial compared to MongoDB's native document architecture. CFO Mike Berry shared his positive diligence findings, highlighting the company's scale, leveraged business model, efficiency opportunities, and strong balance sheet as key strengths.

Raimo Lenschow asked for clarification on the weaker FY26 non-Atlas guidance, questioning if it was a mechanical issue from a smaller renewal portfolio or a change in customer behavior. He also inquired about the integration and sales strategy for the Voyage AI acquisition.

Answer

CFO Serge Tanjga confirmed the non-Atlas headwind is a 'mechanical situation' due to a smaller renewal base after two exceptionally strong years, not a change in customer trends. CEO Dev Ittycheria explained that Voyage AI models will be offered broadly to attract new users while also being deeply integrated into the MongoDB platform to create a superior, unified developer experience.

Raimo Lenschow asked about the EA renewal cycle for Q4 and the potential for AI-driven upsell, and also inquired about the evolving partnership with major hyperscalers like AWS around AI.

Answer

CFO Michael Gordon noted that Q4 is a seasonally large renewal quarter for EA, but the sequential decline is expected due to the significant multiyear deal strength in Q3. CEO Dev Ittycheria described partnerships with AWS, Azure, and GCP as 'very strong,' highlighting deep product integrations and stating that hyperscalers see the value in partnering with MongoDB for performance-critical AI applications.

Raimo Lenschow inquired about the drivers behind the stronger Enterprise Advanced (EA) pipeline for the second half and asked about the emerging AI reference architectures and early customer engagement patterns.

Answer

CFO Michael Gordon stated that EA strength is broad, reflecting the 'run anywhere' strategy, and is not exclusively tied to AI. CEO Dev Ittycheria explained that for AI, MongoDB is well-positioned to handle complex data structures, unifying source data, vector data, and operational data. He added that as LLM performance improves, real-time data access becomes critical, and he believes RAG will be the predominant approach.

Raimo Lenschow inquired about the drivers of Workday's international growth, noting similar growth rates to the U.S., and sought insights into observations from the quarter and pipeline build in international markets.

Answer

CEO Carl Eschenbach expressed pleasure with solid international performance across Europe, APAC, and Japan. He attributed this to product internationalization/localization, leveraging a strong global partner network, and attracting great talent, expecting continued momentum as customers increasingly choose Workday's platform.

Raimo Lenschow inquired about Workday's international growth drivers, specifically what was observed in the quarter and pipeline build, given similar growth rates to the U.S.

Answer

Carl Eschenbach (CEO, Workday) expressed pleasure with solid international performance across Europe, APAC, and Japan. He attributed this to product internationalization/localization, leveraging a strong partner network, and attracting great talent, expecting continued momentum as customers lean into Workday's platform.

Raimo Lenschow sought clarification on the full-year guidance in light of the Q2 beat and the Paradox acquisition, and also asked about the strength of the reference customer base in Europe.

Answer

CFO Zane Rowe reiterated confidence in the full-year outlook, stating they would have maintained the prior guide absent the acquisition. CEO Carl Eschenbach addressed the international question, asserting that Workday has a very strong reference base in Europe, including in Germany and the UK, with some of the largest companies as customers. He also highlighted momentum in Japan and the new market entry into India.

Raimo Lenschow of Barclays inquired about potential changes to the go-to-market strategy under new leadership, with a focus on the international approach.

Answer

CEO Carl Eschenbach described the leadership transition as smooth and stated that while the new executive has deep international experience that will be leveraged, no major changes to the go-to-market motion are planned. He emphasized that the current engine is working well and any adjustments will be refinements to improve upon the existing strategy.

Raimo Lenschow of Barclays inquired about Workday's AI monetization strategy and asked for an explanation of the puts and takes behind the unchanged operating cash flow guidance.

Answer

CEO Carl Eschenbach detailed a multi-pronged AI strategy that includes monetizing specific solutions like Recruiter Agent and Extend Pro, with future agents also priced for value. CFO Zane Rowe explained that OCF guidance is steady because strong Q2 collections balanced a comparatively lower Q3, and an extra Q4 pay period was already factored into the full-year forecast.

Raimo Lenschow asked if the current market environment is a long-term structural change and how the spending mix between R&D and Sales & Marketing might evolve to drive future efficiencies.

Answer

CEO Carl Eschenbach reiterated that the medium-term outlook is based on the current environment being the 'new norm.' CFO Zane Rowe addressed the spending mix, stating that efficiency efforts are balanced across all functions, including leveraging AI in R&D and optimizing their global workforce, rather than shifting focus from one area to another.

Raimo Lenschow questioned why Elastic's revenue beat level in the quarter was lower than historical trends, considering potential changes in guidance philosophy and the impact of deal slippage. He also asked about the significance of the large CISA security win and if it represents market share gains from incumbents.

Answer

CFO Navam Welihinda explained that the guidance was updated closer to the quarter, leading to a smaller beat ($5.5 million), but reaffirmed strong Q2 performance and a significant full-year guidance raise. He noted expected variability and renewal slips impacted quarterly performance but not the full year. CEO Ash Kulkarni highlighted the two largest deals as $20M+ security wins, with CISA's selection of Elastic Security as an "unbelievable endorsement" demonstrating platform strength, AI capabilities, and market share displacement from incumbents.

Raimo Lenschow questioned the lower beat level on total revenue and cloud growth compared to historical performance, considering a new CFO guidance philosophy and potential slippage. He also asked about the significance of the large security win with CISA, specifically if it indicates market share gains from traditional players.

Answer

CFO Navam Welihinda explained that guidance was updated closer to the quarter, leading to a smaller beat, but reiterated strong Q2 performance and a significant full-year guidance raise. He also mentioned expected variability and renewal slips impacting the quarter. CEO Ash Kulkarni confirmed that the two largest deals were security wins, highlighting the maturity and unmatched AI capabilities of Elastic's security offering. He described the CISA deal as an 'unbelievable endorsement' and a consolidation onto Elastic's platform, indicating market share gain from incumbents.

Raimo Lenschow from Barclays inquired about the factors driving the reacceleration in self-managed growth and asked how Elastic's consumption-based pricing model is advantageous in customer conversations about AI.

Answer

CFO Navam Welihinda stated that the strong self-managed growth was broad-based across all geographies and solutions, contributing to the overall strength in sales-led subscription revenue. CEO Ashutosh Kulkarni explained that the consumption model aligns cost directly with value, which customers appreciate for AI workloads as their usage and benefits grow in tandem.

Raimo Lenschow asked how the increasing adoption of vector databases for AI will impact the revenue contribution from Elastic's different business segments and inquired about the modeling expectations for the Monthly Cloud revenue line going forward.

Answer

CEO Ashutosh Kulkarni explained that while GenAI is expanding the Search TAM and will likely make it a larger part of the business over time, AI features are also benefiting Observability and Security. He emphasized that the sales-led motion is the primary focus. CFO Navam Welihinda added that Monthly Cloud revenue, which is primarily a self-service SMB motion, is expected to be roughly flat in fiscal 2026.

Raimo Lenschow inquired about the performance of the self-service business in relation to the sales changes made earlier in the year and asked about customer willingness to adopt Elastic for SIEM, potentially displacing legacy vendors.

Answer

CEO Ash Kulkarni stated that the self-service cloud motion, targeting the SMB segment, remained flattish and is more correlated with the SMB market than sales changes. He noted strong sales-led execution in enterprise and mid-market. Regarding SIEM, Kulkarni highlighted strong customer interest driven by the need for AI-led automation, the ability to analyze data at scale over long periods, and a compelling total cost of ownership.

Raimo Lenschow of Barclays asked about the progress in upselling the large installed Search customer base with new GenAI capabilities and inquired about customer engagement trends in the SIEM market given recent industry disruption.

Answer

CEO Ashutosh Kulkarni described upselling the installed base as a 'natural motion' since customer data is already in Elasticsearch, noting this is driving much of the GenAI success. Regarding SIEM, he stated that AI is now a 'must-have' for security analytics, and Elastic is seeing significant momentum and winning consolidation deals against legacy vendors, aided by programs like the Express Migration Program.

Raimo Lenschow asked about the conversion rate of initial GenAI trials into paid workloads and whether this could help accelerate growth in the second half of the year. He also inquired about the company's plans for costs and investments for the remainder of the year.

Answer

CEO Ashutosh Kulkarni highlighted that the search business accelerated during the quarter, driven by strong customer adoption of semantic search and RAG use cases, which he views as a positive long-term indicator. CFO and COO Janesh Moorjani explained that the company is taking a measured approach to spending, continuing to invest in R&D for GenAI and targeted sales capacity while reducing costs elsewhere. This will result in a spending reduction greater than the revenue reduction, leading to a slightly higher full-year operating margin guidance.

Raimo Lenschow asked about Credit Karma's strong performance, driven by credit card loans and auto insurance, and how Intuit assesses the health of the consumer in relation to Credit Karma's trajectory and confidence in its continued growth.

Answer

Intuit CEO Sasan Goodarzi explained that Credit Karma's success stems from innovation and TurboTax integration, with 45 million monthly active users engaging over five times a month for personalized financial help. He highlighted the role of data, AI, and Lightbox in delivering trusted, personalized experiences that drive market share gains. Goodarzi noted that credit scores and balances are generally stable, with near-prime and sub-prime scores stabilizing after a decline. CFO Sandeep Aujla added that innovation helps partners see better ROI, driving share gains, and that Credit Karma's platform provides crucial support for consumers under economic pressure, regardless of the macro environment.

Raimo Lenschow asked about Credit Karma's strong performance, particularly in credit cards, loans, and auto insurance, and how it relates to the health of the consumer, as well as Intuit's confidence in Credit Karma's continued outperformance.

Answer

CEO Sasan Goodarzi and CFO Sandeep Aujla attributed Credit Karma's success to innovation and TurboTax integration, driving engagement among 45 million monthly active users. They highlighted the role of data, AI, and Lightbox in delivering personalized experiences and market share gains. While consumer credit scores and balances are generally stable, innovation ensures partner ROI and continued share gains, even in challenging economic conditions.

Raimo Lenschow asked about the drivers behind Credit Karma's very strong results and what the company learned about the visibility of that business unit.

Answer

CFO Sandeep Aujla stated that while macro stability helped, the majority of Credit Karma's outperformance was driven by strong execution. He highlighted innovations like AI-powered offer matching and the Lightbox feature, which improved partner connections and drove higher ARPC. Aujla noted this 'management alpha' has put the business on a significantly better trajectory compared to 12 months prior.

Raimo Lenschow inquired about the strong performance of Credit Karma, which significantly outperformed initial guidance, and asked what the company learned about the visibility of this business unit.

Answer

CEO Sasan Goodarzi attributed the results to two factors: continued macro stability and, more importantly, strong execution. He highlighted that AI-driven improvements in connecting customers with the right offers, along with innovations like Lightbox, drove higher ARPC and market share gains in credit cards, personal loans, and insurance. He referred to this outperformance as 'management alpha,' which has put the business on a new trajectory.

Raimo Lenschow asked about the puts and takes behind the 17% growth in online payment volume, which was a slight deceleration. He also inquired about the next iteration of weaving AI into Intuit's products to enhance customer engagement.

Answer

CEO Sasan Goodarzi attributed the 17% payment volume growth to temporary factors, including storms on the East Coast impacting small businesses and the number of days in the quarter, and stated he expects it to accelerate. Regarding AI, he highlighted the 'done for you' strategy, citing the general availability of Intuit Assist for QuickBooks, which automates tasks like invoicing and accounting. For tax, he said to expect dramatically streamlined experiences this season.

Raimo Lenschow of Barclays asked about the growth drivers for App Intelligence, specifically whether new customers are primarily cross-sells from the existing base or net new acquisitions. He also inquired about the lower sequential revenue growth observed this quarter compared to historical trends.

Answer

Or Offer, Co-Founder and CEO, indicated that the majority of App Intelligence customers are cross-sells from the existing 6,000+ customer base, benefiting from established trust and the natural fit with their digital data needs. Rami Myerson, Head of Investor Relations, clarified that the sequential revenue growth was impacted by earlier-than-expected booking of some evaluation contracts in Q2, which would have otherwise made Q3's sequential improvement appear more gradual.

Raimo Lenschow inquired about the growth of App Intelligence customers and its ARR reaching nearly $10 million, specifically asking if these customers are primarily cross-sells or net new. He also asked about the sequential revenue growth in the current quarter being on the lower side historically.

Answer

Or Offer, Co-Founder and CEO, stated that the majority of App Intelligence customers are cross-sells, as existing customers often have both websites and apps, making it an easy and successful sale. Rami Myerson, Head of Investor Relations, clarified that some LLM evaluation contracts were recognized earlier in Q2 than expected, which made the sequential improvement in Q3 appear less gradual.

Raimo Lenschow asked about the mechanics of the large GenAI customer contract, its future potential, the reasons for the dip in Net Retention Rate (NRR), and the drivers behind strong new customer growth.

Answer

Co-Founder & CEO Or Offer explained that GenAI data deals begin with a paid evaluation phase before converting to multi-year ARR contracts, a model applicable to many customers. CFO Jason Schwartz attributed the NRR dip to a lapping effect from large 2024 deals and pointed to the 13% growth in customers over $100k ARR as a key indicator of the successful land-and-expand strategy.

An analyst on behalf of Raimo Lenschow asked for clarity on the visibility into deals supporting the guided H2 2025 revenue reacceleration. They also inquired about the financial impact of the Search Monitor acquisition and any changes to the company's guidance philosophy.

Answer

CEO Or Offer explained that visibility varies by role, with inside sales showing faster ramp and yield compared to enterprise reps with longer sales cycles. CFO Jason Schwartz stated the Search Monitor acquisition has no material impact on guidance and confirmed the company's guidance philosophy remains consistent, aiming to provide targets they are confident in meeting.

Raimo Lenschow asked about CoreWeave's sources of funding for next year's CapEx, specifically how the company thinks about leasing versus other funding methods to gain more flexibility.

Answer

CEO Mike Intrator stated that CoreWeave explores the full suite of potential financing options, choosing the most cost-effective way to increase scale and serve clients. He emphasized that they secure financing for the physical data center, power, GPU, and overall project before signing customers.

Raimo Lenschow inquired about CoreWeave's funding sources for next year's CapEx, specifically the role of leasing versus other methods, and how this provides flexibility for the business.

Answer

CEO Mike Intrator stated that CoreWeave will explore the full suite of potential financing options, including leasing, to find the most cost-effective way to scale and serve clients. He emphasized that CoreWeave secures financing for each deal, ensuring the physical data center, power, GPU, and financing are all accounted for before signing customers.

Raimo Lenschow sought data points supporting the view of a long-term, structural supply-demand imbalance and asked about the importance of latency and data center location for inference.

Answer

CEO Michael Intrator stated that CoreWeave's view of a structural supply constraint is unwavering and based on direct discussions with the largest AI infrastructure consumers. Regarding latency, he explained it is use-case dependent; for complex queries like chain-of-reasoning, compute power is more critical, but the company's strategy of building near population centers provides low-latency optionality.

Raimo Lenschow of Barclays asked for data points supporting the view of a long-term structural supply-demand imbalance and questioned the importance of latency and data center location for inference workloads.

Answer

CEO Michael Intrator reiterated CoreWeave's unwavering belief in a structurally supply-constrained market, based on direct customer feedback. He explained that latency's importance is use-case dependent, being less critical for tasks like chain-of-reasoning, and noted that CoreWeave's strategy is to build near population centers to maintain low-latency optionality.

Raimo Lenschow asked for clarity on the dynamics of capital expenditures, noting the Q1 figure was below consensus while the full-year guidance was in line, and questioned how to think about the fluctuations in spending.

Answer

CFO Nitin Agrawal explained that the full-year CapEx guidance reflects an increased and accelerated investment profile to meet strong customer demand. He reiterated that CapEx is success-based, directly tied to committed customer contracts, and can therefore be lumpy depending on the timing of data center and infrastructure deployments.

Raimo Lenschow asked for insights into the nature of Datadog's growing AI customer base, specifically the 15 customers spending over $1 million and 100 over $100,000 annually, questioning if they are primarily model builders or indicative of a broader new application world.

Answer

Olivier Pomel, Co-Founder and CEO, Datadog, described the AI customer base as fairly broad, encompassing model vendors (LLMs, video/sound generation), coding assistants, infrastructure components, and AI-filled applications, representing both new companies and those that pivoted to AI.

Raimo Lenschow asked for insights into the nature of Datadog's growing AI-native customer base, particularly the 15 customers spending over $1 million and 100 spending over $100,000 annually, questioning if they are primarily model builders or part of a broader new application world.

Answer

CEO Olivier Pomel clarified that the AI-native customer base is fairly broad, encompassing model vendors (LLMs, video/sound generation), coding assistants, infrastructure components, and AI-filled applications, including both new companies and those that pivoted to AI.

Raimo Lenschow of Barclays asked about the expansion of the AI opportunity into traditional enterprise inference workloads and the productivity ramp of salespeople hired in late 2025.

Answer

CEO Olivier Pomel described a multi-layered AI opportunity, starting with infrastructure monitoring and expanding to observability for non-deterministic AI applications, a trend he sees becoming market-wide. CFO David Obstler added that the increased sales capacity is showing positive early results in new logo generation and pipeline growth as new hires continue to ramp.

Raimo Lenschow asked about the rationale for raising Q2 guidance more than the Q1 beat, given market uncertainty. He also requested details on the change in the full-year gross margin guidance and the corrective actions being taken.

Answer

CFO David Obstler explained the guidance reflects Q1's beat and current run rates, with conservatism applied to Q2 and the second half left unchanged due to lower visibility. Regarding gross margin, he and CEO Olivier Pomel noted that higher-than-expected cloud costs from spiky customer growth and new product investments led to the adjustment. They are now shifting resources toward optimization to bring margins back within their historical range.

Raimo Lenschow inquired about observability trends for AI inference workloads beyond large AI training companies and asked what signals are driving the confidence to increase investments in 2025.

Answer

CEO Olivier Pomel noted that customers are increasingly using LLM Observability to monitor third-party AI models, with broad adoption beyond AI-natives. CFO David Obstler explained that the decision to increase investment is a bottoms-up process based on seeing success in underserved geographies, growing channel partnerships, and needs of large enterprises. He added that it was also a 'catch-up' after a more prudent approach in 2023.

Raimo Lenschow asked about the drivers of workload growth, questioning if it's impacted by macro factors or resources being diverted to AI, and also inquired about the company's sales capacity.

Answer

CEO Olivier Pomel explained that the overall move to the cloud is a long-term trend. While some traditional workload growth may be temporarily diverted to AI experimentation, he views this as a precursor to future production growth. CFO David Obstler and Pomel added that the company plans to scale sales capacity in line with top-line growth and is actively investing in underpenetrated markets.

Raimo Lenschow asked about the historical Beti levels, inquiring if economic factors or other changes are impacting the situation, noting a slight departure from previous track records. He also asked how the IWant product is driving extra conversations, lead generation, and pipeline build for sales, given its early and unique market position.

Answer

Chad Richison, President and CEO, explained that Paycom changed its guidance approach in 2025, breaking out recurring revenue and interest, and has since raised revenue and adjusted EBITDA guidance. He expressed pride in the company's accomplishments setting up future growth, noting they didn't guide to specific Beti amounts. Regarding IWant, Mr. Richison highlighted its transformative impact on new employees and C-suite engagement, allowing direct data access. He emphasized Paycom's significant $100 million CapEx investment in its own data centers for AI, contrasting it with competitors' less clear AI strategies.

Raimo Lenschow asked about the current Beti adoption levels, noting they were historically higher, and inquired if economic factors or other changes were impacting the situation. He also asked about Iwant's role in driving extra conversations, lead generation, and pipeline build, given its unique market position.

Answer

Chad Richison, President and CEO of Paycom Software, addressed the Beti question by explaining the change in 2025 guidance to break out recurring revenue and interest tax, and providing a wider initial range. He highlighted that revenues and adjusted EBITDA had been raised since the initial guidance, expressed pride in the company's accomplishments, and clarified that specific Beti amounts were not guided. Regarding Iwant, Mr. Richison noted its transformative impact on new employees and C-suite engagement, contrasting Paycom's self-funded $100 million AI CapEx with competitors' less tangible AI claims.

Raimo Lenschow of Barclays asked about the business impact of the new AI product, iWant, questioning if it's primarily a differentiation tool or if it has future monetization potential, and inquired about the gross margin implications of increased GPU and compute costs.

Answer

CEO Chad Richison explained that iWant is a command-driven AI tool that revolutionizes software interaction, eliminating the need for user training and increasing engagement. He stated monetization will be indirect, driven by increased full-solution adoption, higher sales volume, and improved retention. CFO Bob Foster added that the company will reinvest margin expansion into CapEx for AI and equipment, expecting free cash flow to be similar to the previous year.

Raimo Lenschow inquired about the potential impact of tariffs and economic volatility on Paycom's business and asked for specific examples of the efficiency gains that are contributing to the improved EBITDA margin guidance.

Answer

CEO Chad Richison stated that while Paycom has little direct exposure to tariffs, the company is monitoring the situation as any impact on clients' employee counts could eventually affect them. CFO Bob Foster explained that efficiency gains stem from Paycom's internal use of its own full product suite, such as for expense management and service ticket automation, which allows them to avoid backfilling certain positions.

Raimo Lenschow inquired about the rationale for discontinuing quarterly guidance and asked about the outlook for client renewal rates, questioning if the current stable level is the new normal or if there are ambitions to return to prior highs.

Answer

Incoming CFO Bob Foster explained that providing full-year guidance aligns better with the company's long-term operational focus. CEO Chad Richison added that while the annual retention rate was stable year-over-year, it strengthened throughout 2024 and he expects that trend to continue, expressing a hope for stronger retention moving forward.

Raimo Lenschow inquired about the current state of end-market demand, the evolution of the sales pipeline, and the outlook for float revenue heading into next year.

Answer

CEO Chad Richison stated that demand is strong and sales momentum is increasing, highlighting that September was the company's largest sales month in its history. CFO Craig Boelte added that for every 25 basis point interest rate cut, float revenue is impacted by approximately $6 million on an annualized basis, and the company is considering layering in longer-term investments for its float balances.

Raimo Lenschow also asked Joe Del Preto about the drivers behind Sprout Social's strong profitability this quarter, specifically whether it was due to timing or more fundamental underlying improvements.

Answer

Joe Del Preto, CFO of Sprout Social, attributed the 460 basis point year-over-year improvement in non-GAAP operating margin to revenue overperformance, increased internal efficiency partly due to AI, and a slight push in hiring cadence from Q3 to Q4. He expressed confidence in the business's margin momentum.

Raimo Lenschow with Barclays inquired about the stability of Sprout Social's revenue growth despite strong market momentum and enterprise success, seeking insights into future inflection points. He also asked about the drivers of the quarter's record profitability, questioning if it stemmed from timing or sustainable operational improvements.

Answer

CEO Ryan Barretto explained that while the enterprise segment shows strong growth (21% in 50K+ ARR customers) and high ACV, pressure on the smaller SMB/agency new business segment has been a drag on overall revenue growth. He highlighted opportunities in pricing, packaging, and AI for the smaller market. CFO Joe Del Preto attributed the record 11.9% non-GAAP operating margin to revenue overperformance, increased operational efficiency, internal AI adoption, and a temporary hiring cadence shift into Q4.

Raimo Lenschow of Barclays asked how industry shifts in search and AI are affecting customer pipeline conversations and deal sizes, and also inquired about the gross margin implications of NewsWhip's AI usage.

Answer

CEO Ryan Barretto explained that sales conversations are tailored to specific customer problems, like marketers facing search disruption, with a focus on demonstrating clear ROI. CFO Joe DelPretto assured that due diligence on NewsWhip confirmed its scalable infrastructure, and they do not anticipate any negative gross margin impact as the business grows.

Raimo Lenschow inquired about the early-stage enterprise pipeline, asking for more detail on what Sprout Social is seeing at the higher end of the customer base amidst a volatile market.

Answer

CEO Ryan Barretto highlighted strong enterprise wins across diverse verticals like medical devices, restaurant chains, and food & beverage. He noted healthy pipeline generation, attributing it to the increasing need for brands to engage with customers on social media for marketing, care, and analytics, which drives demand for Sprout's platform.

Raimo Lenschow questioned the economic assumptions underlying the 2025 guidance and asked about any significant changes to the go-to-market strategy for the new year.

Answer

CFO Joe Del Preto stated that the guidance assumes the demand environment in 2025 will not improve from 2024, reflecting a more measured approach based on a full year of sales data. CEO Ryan Barretto added that go-to-market changes are limited to routine fine-tuning and adjustments, with no major strategic shifts to report.

Raimo Lenschow asked about Sprout Social's future role within Salesforce's Agentforce, seeking to understand the depth of the integration and its importance in a generative AI world. He also questioned if focusing on CRPO growth is the right way to view the business, given that calculated bookings from RPO had ticked down.

Answer

CEO Ryan Barretto clarified that Sprout is the exclusive social data channel for Agentforce, enriching CRM records to empower agents. CFO Joe Del Preto addressed the metrics question, advising analysts to focus on the 31% year-over-year CRPO growth as the key leading indicator for future performance, rather than short-term calculated bookings, which can fluctuate.

Raimo Lenschow questioned the increased optimism for Flink's uptake, customer usage, and pipeline translation into business growth. He also asked about the specific drivers for raising Q4 subscription revenue guidance beyond the Q3 beat.

Answer

CEO Jay Kreps expressed excitement about Flink's spectacular growth since GA, noting its potential in data processing and its intersection with AI. CFO Rohan Sivaram added that Flink's breadth (over 1,000 customers) and depth (12 customers >$100K ARR, 4 customers >$1M ARR) are strong indicators. Rohan attributed the Q4 guidance raise to momentum in new use cases, normalized optimization levels, and continued Flink strength in the cloud.

Raimo Lenschow asked about the increased optimism regarding Flink's uptick, customer usage, and pipeline, and how this translates into future business growth. He also questioned the specific drivers for raising the Q4 subscription revenue guidance beyond the Q3 beat.

Answer

CEO Jay Kreps expressed strong excitement about Flink's spectacular growth since its general availability, highlighting its huge market potential and intersection with AI. CFO Rohan Sivaram added that Flink's breadth (over 1,000 customers) and depth (12 customers >$100K ARR, 4 customers >$1M ARR) are strong. Rohan attributed the raised Q4 guidance to momentum in new use cases, normalized optimization levels, and continued strength in Flink Cloud, alongside increasing RPO coverage.

Raimo Lenschow from Barclays asked if the cloud weakness was driven by a single large customer or a broader trend. He also asked for a reminder on how customers are technically achieving these optimizations.

Answer

CFO Rohan Sivaram clarified that the consumption dynamic is broad-based among larger customers and not driven by the single AI-native customer mentioned, which was provided as color for the Q4 outlook. CEO Jay Kreps explained that optimization is not churn to open source but rather technical and contractual efforts. These include consolidating clusters, compressing data, optimizing usage patterns, and making larger, multi-year commitments in exchange for higher discounts, which is reflected in the strong RPO growth.

Raimo Lenschow asked how the guidance accounts for the risk of a consumption slowdown spreading from large to smaller customers and whether M&A in the broader ecosystem is elevating conversations about real-time data.

Answer

CFO Rohan Sivaram noted that consumption from smaller customers has been steady, and with strong top-of-funnel adds on the cloud side, they see less risk in that segment. CEO Jay Kreps added that the perception of streaming has been on a gradual build, becoming a major part of data strategy. While ecosystem M&A helps, he sees it as part of a broader, long-term trend rather than a single catalyst.

Raimo Lenschow requested an update on the momentum of Apache Flink and asked for more details on the Databricks relationship, specifically Confluent's role within that data ecosystem.

Answer

CEO Jay Kreps expressed satisfaction with Flink's progress, noting its product maturity is enabling more production workloads. Regarding Databricks, he positioned Confluent as the essential 'broker of streaming data' for analytics platforms, a role that is becoming more critical for real-time AI applications, and described the partnership as highly productive.

Raimo Lenschow questioned if the WarpStream acquisition could represent a broader opportunity and asked for clarification on how a one-time revenue benefit occurred in the cloud business.

Answer

CEO Jay Kreps positioned WarpStream as a 'best-in-class' product for the 'bring your own cloud' (BYOC) deployment model, completing their portfolio. CFO Rohan Sivaram explained the one-time benefit was from recognizing revenue from unused credits after a customer's international expansion plan did not materialize, but stressed that underlying performance remained strong.

Raimo Lenschow sought clarification on the impact of increased cloud adoption on term and license revenue, particularly for Q4, and asked about the company's progress in application modernization using AI.

Answer

Ken Stillwell, COO and CFO, clarified that with 85% of ACV growth from Pega Cloud, term license revenue is expected to decline over time, though Q1's strong revenue might still result in a year-over-year increase for the full year. Alan Trefler, Founder and CEO, discussed new Blueprint features for analyzing legacy applications, including video uploads for documentation, to create cloud-native replacements and modernize systems, noting several rapid implementations in this area.

Raimo Lenschow with Barclays sought clarification on the impact of increased cloud adoption on term license revenue, particularly for Q4 2025, and inquired about Pegasystems' progress in the application modernization opportunity driven by AI.

Answer

Ken Stillwell, COO and CFO, clarified that while term license revenue is expected to decline over time due to the shift to Pega Cloud (with 85% of ACV growth from cloud), total ACV growth is driven by client expansion. Alan Trefler, Founder and CEO, emphasized that Pega Cloud offers better reliability and performance, making it a bona fide cloud business where ACV is the key momentum indicator. For application modernization, Mr. Trefler highlighted new Blueprint features that allow uploading legacy system assets, including video recordings, to automatically design cloud-native replacements, with several 100-day implementations already in this category.

Raimo Lenschow asked about the drivers behind the record Pega Cloud ACV growth, questioning if it was attributable to Pega Blueprint or other momentum, and inquired about the seasonality of term license renewals for the remainder of the year.

Answer

COO & CFO Kenneth Stillwell confirmed that Pega Blueprint is a significant driver for business activity and is engaged in every sales campaign, contributing to the strongest Q2 the company has ever had. He clarified that while Q1 had a higher renewal cycle for term licenses, Q2 was not unusual and no anomalies are expected in the second half of the year.

Raimo Lenschow inquired about the drivers behind the significant outperformance in term licenses and the reason for the lag between strong Pega Cloud ACV growth and its corresponding revenue recognition.

Answer

Executive Alan Trefler explained that term license revenue is inherently seasonal and not linear, with Q1 being a strong quarter. He also clarified that it typically takes a few quarters for Pega Cloud ACV to convert into recognized revenue, and that a currency impact from the previous year also affected the current quarter's Pega Cloud revenue.

Raimo Lenschow asked Ashim Gupta about the confidence driving UiPath's decision to raise its full-year ARR guidance by more than the beat, considering FX and total revenue. He then asked Daniel Dines about the current market behavior, specifically if customers are still in two camps (RPA/process automation vs. muddled with agents/AI) or if it's all combined, and if a core part of the business continues to be signed.

Answer

Ashim Gupta, Chief Operating and Financial Officer, explained that the raised guidance reflects a consistent philosophy, field sentiment, pipeline momentum, and improvements in the go-to-market side, as well as the positive impact of agentic solutions. Daniel Dines, Founder and CEO, noted that customers exhibit the entire spectrum of understanding, from those who believe AI agents will do everything to the majority realizing the importance of automation programs for agentic initiatives. He emphasized that the combination of orchestration, automation, and agentic is essential for predictable AI in enterprises, with agentic exercises uncovering more automation opportunities, often finding that many "agentic" ideas are better suited for automation.

Raimo Lenschow from Barclays sought clarification on UiPath's agentic model positioning against large vendors like Salesforce and SAP. He also asked what provides management with confidence in their forecast for net new ARR dollar stabilization in the next fiscal year.

Answer

CEO Daniel Dines stated that UiPath's key advantage is in automating processes that span multiple systems (e.g., Salesforce and EPIC), where single-vendor agents are limited. CFO & COO Ashim Gupta attributed confidence in stabilizing net new ARR to improved execution, momentum from the Agentic platform launch, and enhanced pipeline visibility.

Raimo Lenschow inquired about the progress made on shifting sales strategy to include a departmental-level focus and whether Ashim Gupta's expanded role as COO is a permanent or temporary arrangement.

Answer

CEO Daniel Dines stated it's early to comment on progress but highlighted organizational changes, including new leadership in North America, to address both C-level and departmental selling. CFO & COO Ashim Gupta added that his expanded role is viewed as long-term, with a mandate to drive operational efficiency, improve cross-organizational connectivity, and better serve customers.

Raimo Lenschow asked about the opportunity for the Monday Service product compared to CRM and questioned why the full-year guidance was only raised by $3M after a $6M Q2 revenue beat, asking what the buffer was for.

Answer

Co-CEOs Eran Zinman and Roy Mann, along with CFO Eliran Glazer, responded. Zinman acknowledged some downmarket weakness, prompting a conservative guidance stance. Glazer affirmed the guidance is prudent and accounts for uncertainty. Mann expressed excitement for the Service product, noting it's scaling fast with a different go-to-market motion focused on the existing customer base.

Raimo Lenschow noted the very strong Q1 cash flow and asked if there were any special one-time items contributing to it, and what the expected seasonality for cash flow would be for the rest of the year.

Answer

CFO Eliran Glazer explained that Q1 is typically the strongest quarter for cash flow due to robust billings and collections from year-end deals. He noted that Q2 is expected to be weaker due to seasonal factors like bonus payments and salary adjustments. Overall, the full-year cash flow is expected to align with the previously issued guidance.

Raimo Lenschow of Barclays asked about the expected timeline for the new Android enrollment support to impact sales and for details on the Q2 revenue contribution from the Identity Automation acquisition.

Answer

CEO John Strosahl explained that Android support was a customer-driven initiative to secure mixed-device fleets and has seen good initial traction since its July 1 launch. CFO David Rudow added that Identity Automation has been fully integrated, with its former CEO now leading Jamf's education group. He noted the acquisition outperformed expectations and accounted for about half of the quarter's revenue beat.

Raimo Lenschow asked if the recent strength in mobile device management represents a new trend and its key drivers. He also inquired about the philosophy and level of conservatism embedded in the 2025 financial guidance.

Answer

CEO John Strosahl expressed excitement about the mobile and deskless worker opportunity, calling it a significant trend driven by new use cases, such as airlines expanding mobile device use from pilots to ground crews. CFO David Rudow stated his guidance philosophy aligns with Jamf's historical 'beat and raise' approach, creating an achievable model based on the Q4 exit ARR run rate and the company's strong market position.

Raimo Lenschow from Barclays asked for clarification on the strategic relationship with Microsoft, particularly the balance between partnership and competition, and for details on the one-time adjustment to the total customer count.

Answer

CEO John Strosahl characterized the Microsoft relationship as highly collaborative, focusing on co-selling and availability on the Azure marketplace with minimal competitive overlap. Outgoing CFO Ian Goodkind explained the customer count adjustment was a one-off event from a systems update, primarily to reclassify MSPs as single customers and to remove devices past their revenue recognition period.

Raimo Lenschow of Barclays inquired about the progress of the application modernization market and the factors contributing to the decline in the cloud net retention rate (NRR) to 111%.

Answer

CEO Matt Calkins described application modernization as a complex, emerging market where Appian is well-positioned to lead. CFO Serge Tanjga explained the NRR dip was due to the lingering effects of past down-sells and a higher mix of new customer acquisitions, emphasizing that the company's primary focus is on total new business growth rather than managing to a specific NRR target.

Raimo Lenschow asked for CEO Matt Calkins' bigger-picture view on the future of AI agents and how Appian differentiates itself from market hype, and also inquired about any specific factors that impacted Q1 billings.

Answer

Matthew Calkins, Chairman and CEO, emphasized Appian's focus on practical, "boring AI" that delivers measurable results, contrasting it with market hyperbole. He positioned Appian's process platform as essential infrastructure for deploying AI agents safely and effectively. Mark Lynch, Interim CFO, stated there was nothing significant to report regarding factors that impacted Q1 billings.

Raimo Lenschow asked about the pricing model for Appian's AI agents and how it is evolving. He also questioned the slight dip in the cloud net retention rate (NRR) and where that metric is expected to stabilize.

Answer

CEO Matt Calkins explained that AI agents are priced by usage, consistent with industry trends, but noted that Appian is currently subsidizing usage to drive adoption and demonstrate value. Interim CFO Mark Lynch addressed the NRR, stating it remains within the target range of 110-120% and highlighted the best-in-class 99% gross renewal rate as a more important indicator of customer satisfaction.

Raimo Lenschow inquired about the potential for outcome-based pricing related to agentic AI and whether the strong cloud performance indicates a broader market shift in how customers are engaging with AI vendors.

Answer

CEO Matt Calkins stated that while he aspires to move towards outcome-based pricing, it is a future intention and not a current practice, as it requires a clearly defined value context like a specific solution. He attributed the strong performance to customers becoming more sophisticated about AI and recognizing the value of Appian's structured approach, which embeds AI within a process to maximize its productivity and impact.

Raimo Lenschow inquired about the types of vendors being consolidated in large deals, especially concerning logs, and the overall market appetite for these platform consolidation plays.

Answer

CEO Rick McConnell responded that customers are consolidating traditional, isolated log vendors. He emphasized a market shift toward integrated, end-to-end observability platforms, as they provide better outcomes at a lower total cost than standalone log solutions.

Raimo Lenschow asked how Dynatrace formulated its guidance for on-demand consumption (ODC) revenue, given the limited historical data available for this metric.

Answer

CFO James Benson explained that the company analyzed the behavior of its initial customer cohorts as they passed their annual contract reset periods. He noted they looked at the 'attach rate' of ODC to this business but applied a level of conservatism to the forecast due to the limited history and potential for cohort behaviors to change.

Raimo Lenschow asked about the momentum of Dynatrace's logs business, particularly if they are gaining traction from customers dissatisfied with competitors. He also inquired about new logo momentum during the quarter.

Answer

CEO Rick McConnell affirmed the logs market is 'ripe for disruption,' citing customer concerns over competitors' rising costs. He highlighted Dynatrace's value in integrating logs with its AI-driven platform and offering predictable pricing. He stated that 25% of the customer base now uses their logs solution. CFO Jim Benson described new logo additions as 'a little bit light' but noted this was expected following the sales segmentation changes, which initially favor expansion deals. He stressed that landing sizes remain strong.

Raimo Lenschow of Barclays asked how offering a combined HCM and finance solution changes Paylocity's competitive selling motion and whether it opens up opportunities in new industry verticals.

Answer

President, CEO & Director Toby Williams positioned the integrated finance solution as a key differentiator against most HCM competitors. He clarified that the offering is horizontal, similar to the core HCM suite, enabling Paylocity to target clients across all verticals rather than focusing on specific ones. He expressed early optimism about the value proposition's traction in the market.

Raimo Lenschow of Barclays inquired about the current state of the labor market and its impact on hiring. He also asked for the key drivers behind the strong improvement in Q2 gross margins.

Answer

CFO Ryan Glenn described the macro environment as stable, with guidance for the second half of the year remaining prudent on workforce levels. He attributed the gross margin leverage to a successful balance of investing in service while driving efficiency and automation, allowing the company to benefit from its increasing scale.

Raimo Lenschow of Barclays inquired about the role of AI capacity constraints in the industry and whether the increased RPO balance is a key driver of the confidence behind the raised full-year guidance.

Answer

CEO Paddy Srinivasan acknowledged that capacity constraints are a 'way of life' but emphasized DigitalOcean's differentiation is its 'twin stack' cloud, combining a full-stack general-purpose cloud with an agentic AI cloud, which is attracting marquee customers. CFO Matt Steinfort added that while the RPO increase is encouraging, it's still a small part of the business. The guidance raise is based on broad confidence from first-half performance, customer usage visibility, the new migration motion, and AI traction, all while being able to raise free cash flow margin guidance simultaneously.

Raimo Lenschow of Barclays asked about the current market environment, specifically what DigitalOcean is seeing in terms of end-user demand and whether improvements in broader economic indicators are providing a tailwind.

Answer

CEO Padmanabhan Srinivasan stated that the company's guidance does not assume any significant change from the macro environment, planning instead for stable conditions. He noted that while their Net Dollar Retention (NDR) improvement is driven by internal initiatives, any positive macro shift would be an upside but is not currently baked into their financial projections.

Raimo Lenschow asked about the timeline for new product innovations to impact financial metrics like Net Dollar Retention (NDR) and the sustainability of strong EBITDA margins given future investments.

Answer

CEO Paddy Srinivasan explained that while there's no set timeline for product adoption to impact financials, they are seeing positive leading indicators like multi-year contracts and migrations from hyperscalers. He noted the core business NDR is already trending ahead of the reported blended rate. CFO Matt Steinfort added that Q3 EBITDA strength came from disciplined cost management and that while spending will ramp in Q4, they feel good about the overall margin profile continuing into the next year.

Raimo Lenschow of Barclays asked about the market perception of ZoomInfo's Copilot and how it stands out against competing AI offerings in a crowded market.

Answer

CEO Henry Schuck stated that direct customer feedback confirms ZoomInfo is ahead on the innovation curve with Copilot. He noted they were first to market and plan to expand their lead with a major 'Copilot 2.0' release later in the year, featuring enhanced functionality and new AI agents.

Raimo Lenschow of Barclays asked about the market perception of ZoomInfo's Copilot and how it stands out against competing AI offerings.

Answer

CEO Henry Schuck stated that direct customer feedback confirms ZoomInfo is ahead of the competition on the innovation curve. He emphasized their first-mover advantage and plans to expand their lead with a major 'Copilot 2.0' release later in the year, which will introduce significantly enhanced functionality and new AI agents.

Asked whether the cautious guidance buffer was more related to risks in the downmarket or upmarket, and questioned how customers are understanding ZoomInfo's positioning amidst the crowded AI and Copilot vendor landscape.

Answer

The company stated that the downmarket segment is more reactive to macro slowdowns and that their guidance accounts for this. They believe their key differentiator in the AI space is the ability to unify necessary third-party data with a customer's first-party data, which is essential for effective go-to-market AI and something competitors cannot easily replicate.

Raimo Lenschow from Barclays asked for perspective on a competitor receiving a strategic investment from Salesforce, questioning how Five9 views this as an industry endorsement and its impact on partnerships.

Answer

CEO & Chairman Mike Burkland characterized the rumored investment as a positive endorsement of the CCaaS space. He stated that Five9's own partnership momentum with key players like Salesforce and ServiceNow is stronger than ever, with robust co-selling and co-development efforts that he does not expect to change.

Raimo Lenschow of Barclays questioned how Genius AI is influencing customer decisions in the current macro environment and asked about the organizational impact of the company's transformation initiatives.

Answer

Executive Michael Burkland responded that the 'AI revolution' is creating urgency among customers, with the AI Blueprint program successfully converting 50% of participants into paying AI customers. President Bryan Lee added that the recent workforce reduction was broad but strategically avoided impacting sales capacity, with reinvestment focused on go-to-market and AI initiatives.

Asked about the current business environment concerning consumer uncertainty and tariffs, and questioned the potential impact and reasoning behind the company's rebranding from BigCommerce to Commerce.

Answer

The company is not seeing a significant impact from tariffs and observes strong demand in B2B and for discoverability solutions due to AI. The rebranding is a corporate-level change to better reflect the company's full product suite, including the platform-agnostic Feedonomics, and is not expected to disrupt new customer acquisition.

Asked about the dependency of the company's plans on the macro environment and how the company balances its partner strategy with developing its own capabilities in areas like payments.

Answer

The company's outlook is conservative and not dependent on macro improvements. The partner strategy is a key differentiator from competitors like Shopify; BigCommerce embraces an open ecosystem, planning to bundle partner solutions to drive value, which strengthens rather than strains partner relationships.

Raimo Lenschow of Barclays asked for more detail on the Applications business, noting its strong performance, such as 22% growth in Fusion, seems overlooked amid the focus on OCI.

Answer

CEO Safra Catz explained that the underlying strength of strategic SaaS products is now more visible as headwinds from non-strategic businesses fade, with AI capabilities driving cloud adoption. CTO Larry Ellison added that customers are increasingly choosing Oracle's fully integrated application suite (ERP, HCM, SCM) to eliminate integration costs and gain a unified, AI-ready platform, leading to market share gains.

Raimo Lenschow asked about the drivers behind the strong growth in Oracle's SaaS back-office business, noting its outperformance at a time when companies are not typically focused on such systems.

Answer

CEO Safra Catz countered the premise, stating that companies are under intense pressure to improve efficiency, which drives strong demand for Oracle's automated back-office solutions like Fusion. She highlighted that customers want to reduce operational spending to invest in differentiation and leverage their data with Oracle's embedded AI capabilities. Catz also revealed that booking trends for these applications have markedly accelerated.

Raimo Lenschow of Barclays asked how the new multi-cloud agreements with all major hyperscalers, including the recent AWS deal, will impact the migration of on-premise database workloads to the public cloud.

Answer

Chairman and CTO Larry Ellison explained that these partnerships will 'turbocharge the growth' of the database business by making the best, Exadata-based versions of the Oracle Database available everywhere. He also highlighted a parallel trend of significant growth in private clouds, which offer identical, automated functionality as public clouds but behind a customer's firewall. He predicted private clouds will greatly outnumber public clouds, and Oracle is positioned to win in both scenarios.

Raimo Lenschow inquired about the timing of customer go-lives in Q1, asking if the pattern was simply a result of a very strong Q4 sales period and the natural shape of implementation schedules.

Answer

CEO David Ossip confirmed this was correct. He explained that the distribution of go-lives between Q4 and Q1 can vary year-to-year based on how the calendar aligns with customers' payroll start dates. The strong sales in Q4 naturally led to a corresponding pattern of project kickoffs and subsequent go-lives.

Raimo Lenschow asked how strong Q4 sales would translate to 2025 revenue, given the guidance was slightly below consensus, and questioned why free cash flow guidance wasn't raised alongside the increased EBITDA outlook.

Answer

CEO David Ossip explained that strong sales were broad-based across all segments and that the 17.9% cloud ARR growth would flow through the system. CFO Jeremy Johnson addressed the guidance, stating the EBITDA increase comes from cost controls and efficiencies. He noted that while optimistic about free cash flow, they chose to maintain the current guidance as it is the first year they are providing a full-year FCF outlook.

Raimo Lenschow asked about progress with the partner channel, particularly large SIs, and sought clarification on the commentary about elongated sales cycles despite a stable macro environment.

Answer

CEO David Ossip confirmed strong progress in the partner channel, citing a new agreement with a top global SI and healthy partner engagement for their upcoming conference. He clarified that elongated sales cycles are a function of moving upmarket and selling broader, more complex suite deals, which naturally take longer, rather than a change in the macro demand environment.

On behalf of Raimo Lenschow of Barclays, an analyst asked about Teradata's role in the AI agent ecosystem with partners like ServiceNow and the drivers behind improved customer retention.

Answer

CEO Stephen McMillan highlighted the ServiceNow partnership as an example of making agentic AI implementable by using Teradata to find real-time insights that trigger workflows. He attributed retention improvements to a confluence of factors: a new appreciation for Teradata's innovation, its ability to deliver business value at scale, and new platform capabilities for AI/ML.

Raimo Lenschow asked about the evolving relationship between open table formats and traditional structured data warehousing, and also inquired about weaker leading indicators like billings and cloud ARR.

Answer

CEO Stephen McMillan positioned open table formats as an opportunity to apply Teradata's performance architecture and new enterprise vector store to gain insights from all data types. CFO Claire Bramley addressed linearity by providing specific Q1 revenue guidance and reiterating that total ARR will be below its full-year range in H1 due to seasonal erosion patterns.

Raimo Lenschow asked for clarification on the Q3 free cash flow outperformance, questioning why the full-year guidance remained unchanged despite the beat.

Answer

CFO Claire Bramley explained that the strong Q3 performance was primarily due to a 'linearity impact' related to working capital, with favorable timing on DSO and DPO. She indicated this was a shift between Q3 and Q4, and the company remains confident in achieving its full-year free cash flow guidance.

Raimo Lenschow from Barclays asked for a comparison of customer behavior in the current uncertain economic climate versus what was observed in 2022 and 2023.

Answer

CEO Andrew Bialecki stated that Klaviyo is a mission-critical revenue engine, and in uncertain times, customers double down on high-ROI existing consumer relationships. CFO Amanda Whalen added that Klaviyo indexes to digital relationships, not GMV, leading to less volatility, and noted that key metrics like customer sales cycles remain stable.

Raimo Lenschow asked how the seemingly downmarket WooCommerce partnership reconciles with the upmarket strategy, and also inquired about the rationale and impact of the new auto-downgrade pricing feature.

Answer

Co-Founder and CEO Andrew Bialecki explained that Klaviyo already serves 15,000 WooCommerce customers and sees the partnership as an opportunistic way to solidify its 'default status' across the entire market spectrum. CFO Amanda Whalen added that the auto-downgrade feature was a customer request to reduce friction and that the overall pricing changes are expected to have a minimal net revenue benefit for the year.

Raimo Lenschow from Barclays asked for clarification on the mentioned market softness, questioning if it represented a recent change or was a continuation of existing macroeconomic pressures.

Answer

CFO Amanda Whalen clarified that the softness is consistent with trends observed in prior quarters, primarily affecting the SMB segment's expansion. She emphasized that the macro impact has not materially changed and that Klaviyo's diverse customer base and value proposition provide resilience.

Raimo Lenschow of Barclays PLC asked if the adoption of agentic AI, with its easier ROI use cases, could accelerate the revenue mix shift towards CRM and other business workflows.

Answer

President and CFO Gina Mastantuono reiterated the long-term expectation for CRM and HR workflows to grow as a percentage of the total, and noted that AI is expected to lift all workflows across the enterprise, not just one. President, CPO and COO Amit Zavery added that AI is an integral part of the platform, driving value across all existing workflows while also creating new opportunities for customers to use the agentic platform itself to solve complex problems.

Raimo Lenschow inquired about how C-level executives are thinking about AI budgets for the upcoming year. He asked whether the funding is coming from existing IT budgets or new, separate budgets, and how ServiceNow is positioning itself to capture that share.

Answer

CEO Bill McDermott stated that IT budgets are expected to grow significantly next year, with software and GenAI as top priorities. He believes ServiceNow will gain share from this growing IT budget, but also sees new money coming from other departmental line items to fund AI initiatives. Furthermore, he noted a consolidation effect where customers are replacing hundreds of point solutions with the ServiceNow platform, freeing up additional budget.

Raimo Lenschow inquired about the C-level perspective on AI funding for the upcoming year, asking if budgets are coming from existing IT spend or new sources, and how ServiceNow ensures it continues to gain share of that investment.

Answer

CEO Bill McDermott expressed confidence, citing Gartner's forecast for IT spending to grow nearly 10.5% next year. He stated that ServiceNow is gaining share within this growing IT budget but also sees new investment being allocated to GenAI, sometimes by reallocating funds from other departments. He also pointed to a significant consolidation effect, where customers replace hundreds of point solutions with the Now Platform, freeing up budget and driving growth for ServiceNow.

Raimo Lenschow inquired about the progress of new customer acquisition through Capella and how the company views the balance between growth and profitability going forward.

Answer

CFO Gregory Henry confirmed that Capella remains the primary engine for new logos, contributing to a strong quarter of 44 net new customers. On balancing growth and profitability, Henry stated the company has proven it can be more efficient while still investing heavily in R&D for AI-driven growth. CEO Matthew Cain added that they are building for the long term by finding leverage across the business and expect to acquire customers more efficiently through new developer-focused initiatives.

Raimo Lenschow asked for clarity on how Couchbase's significant Q4 pipeline opportunities are expected to translate into ARR and revenue, and whether there's a lag in recognition. He also inquired about customer conversations regarding Couchbase's role in their AI strategies.

Answer

CEO Matthew Cain confirmed the strong Q4 pipeline is due to a second-half weighted renewal pool and progress with large, strategic accounts making long-term platform decisions. He noted that customer conversations consistently involve AI's implications for their data platform. CFO Gregory Henry added that most Q4 ARR will translate into revenue within the quarter, though some deals could pull forward from Q1, a factor already incorporated into the guidance.

Raimo Lenschow asked if the large amount of contracted ARR for Q4 was due to a change in deal structuring and sought to distinguish the drivers of 'down-sell' from outright customer loss.

Answer

CFO Gregory Henry clarified that there was no change in deal structuring; the dynamic was a result of large, multi-year renewals from last year with built-in growth tranches. He also specified that the main headwind in Q2 was from two significant customer losses, while down-sells are a more normal and less impactful part of business, such as when a customer spins down a single application.

Raimo Lenschow asked if recent changes in content moderation policies at major social media companies have altered discussions with clients, and also requested an update on the integration progress of former Oracle clients.

Answer

CEO Lisa Utzschneider confirmed that shifts in social media policies have acted as a tailwind, prompting clients to lean more heavily on IAS for trust and accurate media classification. Regarding the Oracle wins, she noted that Q4 was focused on integration and onboarding, with significant upsell opportunities now present in brand safety and the mid-market segment.

Raimo Lenschow asked if the current weakness in truck volumes is a late-cycle indicator that could improve following recent strength in ocean volumes. He also requested an explanation for the operating cash flow figure, which appeared lower relative to other strong quarterly results.

Answer

CEO Edward Ryan agreed that truck volumes typically follow ocean freight, expressing optimism that strong ocean volumes could lead to a recovery. CFO Allan Brett explained that operating cash flow was impacted by a required accounting treatment for a $25.0 million earn-out payment. Excluding this unique item, cash flow from operations was 85% of adjusted EBITDA, in line with expectations.

Raimo Lenschow from Barclays asked about the cyclical relationship between truck volumes and other freight modes. He also sought an explanation for the operating cash flow figure, which appeared lower than expected.

Answer

CEO Ed Ryan agreed that truck volumes typically follow ocean freight and expressed optimism that recent high ocean volumes would boost future truck volumes. CFO Allan Brett explained that operating cash flow was impacted by a $25.0 million non-recurring accounting charge related to earn-out payments exceeding initial estimates. Excluding this item, cash flow was 85% of adjusted EBITDA, in line with expectations.