Rohit Kulkarni

Rohit Kulkarni asked about the total addressable market for RedCloud's JV and capital-light expansion model in Turkey and other geographies, and how these deals strategically benefit RedCloud's core marketplace offering. He also inquired about first-half transaction volume trends, the impact of reduced fees and marketing commissions on distributor reactions, and the performance of core geographies like Nigeria, Brazil, and South Africa. Finally, he sought clarity on the assumptions behind the $100 million revenue target for 2026, including the linearity and ramp-up timetable for new JV markets.

Answer

CEO Justin Floyd explained that Turkey and Saudi Arabia represent over $100 billion each in total addressable market, serving as critical trading hubs that extend RedCloud's reach into adjacent markets. He highlighted the strategic importance of RedCloud's intelligent infrastructure and data moats, which are compelling to JV partners like ProRaba Limited in Turkey and Majid Alghaslan in Saudi Arabia. Chief Strategy Officer Raju Datla detailed that the H1 2025 take rate was strategically reduced to acquire more data for AI models, enabling licensing deals. He confirmed Nigeria as the strongest performer, contributing significantly to the $52 million H2 2025 guidance, with South Africa and Brazil also performing well. For 2026, Mr. Datla projected $60 million from existing markets, $10-11 million from licensing fees, and $30 million from new JV markets, with Saudi Arabia going live by December 30th and Turkey by the end of January.

Rohit Kulkarni asked about RedCloud's capital-light JV strategy, specifically for Turkey and Saudi Arabia, inquiring about the total addressable market and how these deals strategically enhance RedCloud's core marketplace offering. He also questioned the first-half transaction volume trends, the impact of reduced fees and marketing commissions on distributor reactions, and the performance of core geographies like Nigeria, Brazil, and South Africa.

Answer

CEO Justin Floyd explained Turkey's strategic location as a trading hub and Saudi Arabia's similar position, highlighting multi-billion dollar addressable markets and the partners' commitment due to RedCloud's proven AI infrastructure, strengthened balance sheet, and leadership. CSO Raju Datla detailed the H2 revenue guidance, noting the strategic reduction in take rates to acquire more data for AI model refinement and the efficiency of marketing commissions. He confirmed Nigeria as the top performer, with Brazil and South Africa also performing well, while Argentina's strategy was reallocated to higher-return JV opportunities. Later, Raju Datla provided a breakdown of the $100 million 2026 revenue target, with Justin Floyd confirming Saudi Arabia's go-live in December and Turkey's by end of January.

Rohit Kulkarni inquired about early Q3 trends following the release of federal funding, the integration of AI into new products like Career Explorer, the drivers of gross margin improvement, the reasons for the surge in Net Dollar Retention (NDRR), and the go-to-market strategy in China.

Answer

CEO Paul Kellenberger expressed cautious optimism about Q3, detailed the use of AI and ML in the new zSpace AI assistant and next-gen stylus, and explained that the uptick in China was from partner success, not direct investment. CFO Erick DeOliveira attributed the 7.5-point gross margin expansion primarily to structural improvements from new hardware and more first-party software. DeOliveira also clarified that the high NDRR was driven by large existing customers significantly expanding their software license footprint.

Asked about Q3 trends related to federal funding, the integration and value proposition of AI in new products, the sustainability of gross margin improvements, the drivers behind the increase in Net Dollar Retention (NDRR), the reasons for an uptick in business from China, and the current number of quota-carrying sales representatives.

Answer

The company is cautiously optimistic about Q3 funding but it's too early to tell. AI is being integrated into the stylus and software like Career Explorer for personalized learning. Gross margin improvement is largely structural and permanent, driven by new hardware and a shift to more first-party software. The high NDRR was driven by existing customers significantly expanding their software and/or hardware footprint. The China uptick is from a local partner's success, not new investment from zSpace. The direct sales team has grown from 8 to 11 reps year-over-year.

Asked about the market reception of the two new products, a historical comparison for the current sales cycle uncertainty, and the future gross margin trend.

Answer

Executives noted strong reception for the new Imagine elementary solution and continued demand in the CTE market. They stated there is no direct historical comparison for the current market uncertainty but are confident due to available customer funds for Q2/Q3. Gross margins are expected to improve due to a continued shift to software and a significant, one-time uplift from the lower cost of new hardware models, potentially adding 4-7 percentage points.

Rohit Kulkarni asked about the types of demand and use cases Fiverr is seeing for AI agents and workflow automation, and questioned the assumptions behind GMV trends for the second half of the year.

Answer

Micha Kaufman, Founder & CEO, provided specific growth metrics, noting that categories like AI agents and workflow automation have grown tenfold in the last six months. He emphasized that Fiverr experts are crucial in bridging the gap between AI technology and business results. Ofer Katz, President & CFO, added that they view the macro environment as stable and are not interpreting minor GMV fluctuations as a new trend, thus reiterating guidance for H2 GMV to be flat to slightly down.

Rohit Kulkarni inquired about the specific categories driving the company's upmarket demand and asked about the rationale and goals behind the new freelancer equity program.

Answer

CEO Micha Kaufman identified Programming & Tech as a key category driving upmarket growth, aided by products like dynamic matching. Regarding the equity program, he described it as an industry-first initiative to reward top-performing freelancers, allowing them to 'own a piece' of the future they are helping to build, with formal details to be filed soon.

Rohit Kulkarni of ROTH Capital Partners, LLC asked about the company's hiring plans and cost discipline. He also sought more color on the recent step-up in take rate expansion and requested an update on capital allocation, specifically regarding the convertible notes and share buybacks.

Answer

CEO Micha Kaufman described hiring as "very disciplined" but noted the company isn't shy about investing in product and growth where needed. He attributed the strong take rate to consistent, methodical execution on products that add value for users, not a coincidental event, and expects the trend to continue. CFO Ofer Katz added that the company has sufficient cash to manage the convertible note liability and will maintain flexibility. Regarding buybacks, he stated they are actively managed to prioritize long-term shareholder value.

Rohit Kulkarni from ROTH Capital Partners, LLC inquired about the drivers behind the improved net retention rate, asked for color on the growth of the core Yext business excluding recent acquisitions, and questioned the timing and motivation for securing the new loan facility from BlackRock.

Answer

CEO Mike Walrath explained that improved gross and net retention are driven by the increasing value perception of Yext's core products in a fragmenting search market, which combats commoditization. He noted upsell is driven by innovative products like Scout. CFO Daryl Bond stated the new BlackRock credit facility was timed as the prior SVB facility was expiring and offers better terms and flexibility to pursue M&A and other growth initiatives. Walrath added that the facility allows Yext to be agile in a market with growing M&A opportunities.

Rohit Kulkarni of ROTH Capital Partners asked about the company's spending philosophy for fiscal 2026, its investment priorities for achieving the $100M+ EBITDA target, and the rationale behind the Places Scout acquisition in the context of search fragmentation.

Answer

CEO Michael Walrath stated that Yext will manage expenses conservatively until ARR growth accelerates, with the flexibility to reinvest in growth or allow profit to flow to the bottom line. CFO Darryl Bond noted Hearsay integration synergies will also contribute. Walrath added that the Places Scout acquisition provides critical competitive data and insights, which, combined with Yext's platform, helps clients navigate the increasingly fragmented AI-driven search landscape.

Rohit Kulkarni from ROTH Capital Partners questioned how recent deal acceleration aligns with conservative Q4 guidance and the role of FX. He also asked about the go-to-market strategy for Yext Social and the company's updated approach to achieving the Rule of 40.

Answer

CEO Mike Walrath explained the guidance remains conservative despite positive signs, while CFO Darryl Bond confirmed FX headwinds and deal timing impact the Q4 forecast. Walrath positioned Yext Social as a response to customer demand for unified platforms. On the Rule of 40, Walrath noted significant progress and stated future gains would be driven more by revenue growth, both organic and inorganic.

Rohit Kulkarni of ROTH Capital Partners asked about the most immediate cross-sell and upsell opportunities between the Yext and Hearsay customer bases. He also requested an update on organic ARR growth expectations and questioned when the company anticipates its Gen AI tools will begin to materially impact bookings and new deals.

Answer

CEO Mike Walrath identified the most actionable opportunities as instances where one company has a customer the other does not, with the consolidation theme acting as a tailwind. Regarding ARR, he stated that due to macro uncertainty, the company expects stable to modest growth. On Gen AI, Walrath expressed a long-term view, suggesting that while it's not yet a major driver of bookings, it will become a significant tailwind in the coming years as it's integrated into platforms, emphasizing that a strong data strategy is foundational.

Rohit Kulkarni from ROTH Capital Partners asked when AI's contribution would be significant enough to reaccelerate overall GSV growth, inquired about enterprise deal velocity, and questioned the rationale for a stable take rate outlook in 2025.

Answer

Management expressed confidence in GSV reacceleration in 2026, driven by AI, enterprise, and ads. CFO Erica Gessert noted no change in enterprise deal velocity and explained that the stable 2025 take rate allows for experimentation to set up for more meaningful expansion in 2026, despite strong current growth in ad monetization revenue.

Jared, on behalf of Rohit Kulkarni from ROTH Capital Partners, asked how Upwork's capital allocation philosophy might evolve with its strong free cash flow generation and questioned the company's visibility and confidence in its annual guidance.

Answer

CEO Hayden Brown explained the capital allocation strategy is to judiciously invest in organic growth, pursue small tech and talent M&A, and return capital to shareholders, intending to fully offset stock-based compensation dilution going forward. CFO Erica Gessert expressed confidence in the 2025 guidance, assuming the macro environment remains stable, but noted any significant improvement would likely impact the business with a 6-to-9-month lag.

Asked for evidence supporting the confidence in the long-term benefits of the short-term trade-offs from the NEXT transition, and for more detail on the H1'25 revenue guide and the strategy to win back large advertisers.

Answer

Nirav Tolia cited early positive signals, like infrequent users engaging more with third-party content. Matt Anderson explained the H1'25 guide reflects intentional ad supply constraints for testing, and the plan for large advertisers involves enabling programmatic buying and proving performance, which will take time.

Rohit Kulkarni of ROTH Capital Partners asked for an update on the company's confidence in its three-year outlook for 15% bookings growth and inquired how current market share compares to pre-pandemic levels.

Answer

CEO David Risher and CFO Erin Brewer both expressed strong confidence in their long-range plan, emphasizing that the market's fundamentals are strong and short-term price fluctuations are expected. They highlighted growth drivers like Lyft Media and their healthcare business. Regarding market share, Risher stated it's the highest since 2022 and likely since before the pandemic, but did not have specific 2019 comparison data available, viewing share as a trailing indicator of strong execution.

Rohit Kulkarni of ROTH Capital Partners inquired about the use of Generative AI in Reddit's ad tech, its impact on advertiser adoption, and what new customer categories are being attracted by these tools.

Answer

COO Jen Wong highlighted the use of a GenAI-powered headline generator to improve ad resonance. She also mentioned the recent acquisition of Memorable AI to provide creative insights, with a future roadmap to integrate these insights with GenAI for automated creative optimization. The goal is to simplify campaign setup and optimization, making the platform more accessible.