Ryan MacDonald

Ryan MacDonald followed up on health system AI strategy, asking how much is a top-down, system-wide strategy versus one-off physician usage, and how health systems are grappling with potentially shifting towards a more formal, top-down approach.

Answer

Jeff Tangney, Co-founder and CEO, noted a mix of both bottom-up and top-down adoption, with early discussions often starting with CIO/CMIOs. He anticipates more vigorous AI enforcement from hospitals this year due to concerns about patient data leaks, liability, and accuracy. He emphasized Doximity's strong position as a trusted platform with 15 years of experience working with hospital partners and doctors.

Ryan MacDonald asked if Doximity is observing any shifts in pharma budget allocations due to potential regulatory changes closing direct patient marketing loopholes on TV, and if this creates a tailwind for HCP budgets. He also inquired about the AI strategy in health systems, specifically the balance between top-down, system-wide approaches and bottom-up, individual physician usage.

Answer

Perry Gold, VP of Investor Relations, stated that Doximity has not yet seen a positive impact from D2C marketing changes in the upfront season, noting that enforcement was delayed by a government shutdown. He believes increased FDA enforcement could eventually shift D2C money to HCP marketing. Jeff Tangney, CEO and Co-Founder, described a mixed AI adoption strategy in health systems, starting with top-down CIO/CMIO discussions that then spread bottom-up. He anticipates more rigorous AI enforcement this year due to concerns about patient data, liability, and accuracy, which favors Doximity as a trusted platform.

Ryan MacDonald asked if the Trump RX and "most favored nation" pricing topics are coming up in conversations with pharma customers, and if this policy could impact budget discussions for next year. He also inquired about the magnitude of impact from Pathway's integration on workflow tools and its leverageability in upfront discussions.

Answer

VP of Investor Relations Perry Gold stated that the Trump RX news is very recent, with limited details, but appears to be a net positive for the industry by expanding access to GLP-1s for Medicare/Medicaid patients. He noted it's too early to comment on its effect on upfronts. CEO Jeff Tangney explained that Pathway is not actively being sold or monetized yet, as Doximity is focusing on the physician experience first. He highlighted the integrated drug reference as a key benefit, providing accurate, peer-reviewed answers to frequent drug-related questions, which he believes is unique in the market and addresses LLM hallucination issues.

Ryan MacDonald asked if the Trump RX and 'most favored nation' pricing topics are influencing budget conversations with pharma customers, considering potential impacts on margins and expanded patient access. He also followed up on the impact of Pathway's integration on user growth for workflow tools and its leverageability in upfront discussions for the next year.

Answer

Perry Gold, VP of Investor Relations, stated it's too early to comment definitively as the news is very recent. He noted that on the surface, it appears to be a net positive for the industry, potentially expanding access to GLP-1s for Medicare/Medicaid patients. Jeff Tangney, Co-founder and CEO, explained that Pathway is not actively being monetized yet, with the focus on physician experience. He highlighted the integrated drug reference as a key benefit, providing accurate, peer-reviewed answers to frequent drug-related questions, distinguishing Doximity from other AI solutions.

Ryan Macdonald from Needham & Company asked about the integration plan for the newly acquired Pathway and the strategy to build its brand awareness among physicians.

Answer

CEO Jeff Tangney explained that Pathway's AI has already been largely integrated into the free Doximity GPT product, creating a unified tool for all physician questions. He emphasized they acquired the 'best' AI search company, evidenced by its top score on the U.S. Medical Licensing Exam. The strategy is to leverage the existing Doximity GPT user base and make the superior tool free to establish it as the market leader.

Ryan MacDonald, on for Scott Berg, asked if the 'No Handouts for Drug Advertisements Act' was discussed with clients and if it could be a potential tailwind for Doximity. He also inquired about how the earlier launch of integrated programs is affecting the seasonality of the business.

Answer

CSO Dr. Nate Gross stated there was nothing specific to report from clients on the act, noting that shifts from DTC to HCP spending are typically gradual. CFO Anna Bryson explained that while the revenue curve will be similar to last year's for now, the move to January launches for integrated programs is expected to create a more predictable and consistent revenue curve over the next three years.

Ryan MacDonald asked about the growth runway and customer penetration for the point-of-care and formulary products, and also inquired about the ramp-up plan for new agency partners.

Answer

CFO Anna Bryson stated that Doximity is in the 'early innings' with these new products, which now account for 20% of pharmaceutical sales, and believes they could become as large as the news feed business in 3-5 years. CEO Jeff Tangney added that the company is training its 10 new agency partners and expects to add more, noting that these partnerships are already strengthening SMB growth.

Ryan MacDonald asked for clarification on the updated fiscal 2026 guidance, noting that a $7.5 million AccessOne revenue contribution only resulted in a $3 million midpoint increase, and whether this implies a $4.5 million shortfall in the core subscription or network solutions business.

Answer

CFO Balaji Gandhi confirmed that the difference is largely due to being more measured around network solutions, given the fluidity and ongoing decisions in the selling season. He stated it's not indicative of any long-term concerns for the following year.

Ryan MacDonald asked for clarification on the updated fiscal 2026 guidance, noting that the $7.5 million revenue contribution from AccessOne resulted in only a $3 million increase at the midpoint of the guidance range, and questioned if this implied a shortfall in the core Subscription or Network Solutions business.

Answer

Balaji Gandhi (CFO, Phreesia) explained that the difference is primarily due to a more measured approach to Network Solutions guidance, given the fluidity and ongoing nature of the selling season. He clarified that this adjustment is not indicative of any underlying issues for the following fiscal year.

Ryan MacDonald inquired about the revenue mix of AccessOne (interest vs. 0% fees) and the near-term cross-sell opportunities for AccessOne into Phreesia's base or Phreesia's offerings into AccessOne's base.

Answer

Balaji Gandhi (CFO) stated that while excited about the acquisition, detailed plans and revenue mix specifics cannot be discussed until the transaction officially closes.

Ryan MacDonald asked about AccessOne's revenue mix (interest vs. 0% interest fees) and near-term cross-sell opportunities post-acquisition.

Answer

CFO Balaji Gandhi stated that while excited about the acquisition, specific plans or revenue mix details cannot be discussed until the transaction officially closes.

Ryan Macdonald asked about the potential impact of the proposed 'No Tax Breaks for Drug Ads Act,' whether it is a topic of discussion with pharma clients, and if it poses a risk or an opportunity for Phreesia.

Answer

CFO Balaji Gandhi noted that while such legislation is often discussed, Phreesia's policy is to wait for concrete developments. He stressed that Phreesia's differentiated platform, which delivers personalized content based on privacy and consent, provides a strong and defensible value proposition regardless of such legislative changes.

Ryan MacDonald asked how Phreesia is positioning its Network Solutions business to capture ad spend shifting from other channels. He also inquired about the confidence in the fiscal 2026 guidance for new client additions given the macro environment.

Answer

Executive Balaji Gandhi emphasized that Phreesia's platform is differentiated by its focus on privacy and consent. He also expressed confidence in the client acquisition targets for fiscal 2026, supported by continued investment in sales and marketing.

Ryan MacDonald asked about the drivers behind the strong oncology genomics volume growth, specifically whether it's due to a broader market shift to NGS testing or Tempus AI's internal execution and sales coverage changes.

Answer

Eric Lefkofsky (CEO, Tempus AI) attributed the success primarily to a more efficient salesforce following previous changes and the benefit of their integrated technology delivering comprehensive results. He acknowledged general market tailwinds from increased biomarker identification but emphasized Tempus AI's growth was not from one-time benefits like concurrent testing.

Ryan Macdonald of Needham & Company asked about the incremental demand from other partners for building foundational AI models. He also inquired about the timeline for a significant revenue contribution from the MRD portfolio, specifically tied to MolDX reimbursement.

Answer

CEO Eric Lefkofsky stated that Tempus is in 'very deep conversations' with other pharma companies about building similar AI models, suggesting others will likely follow AstraZeneca's lead. On MRD, he confirmed the portfolio is resonating well but volumes are being gated pending reimbursement. CFO Jim Rogers reiterated that they anticipate reimbursement in 2025, but a meaningful revenue uptick from MRD is not built into the 2025 guide and is more of a 2026 event.

Ryan MacDonald inquired about the hereditary testing business (legacy Ambry), asking what drove its 23% unit growth, which surpassed the mid-to-high-teens expectation, and whether this higher growth rate is sustainable.

Answer

CEO Eric Lefkofsky stated that while the performance is strong, the company is not yet updating its long-term outlook for the business. He reiterated his belief that the narrative of hereditary screening being a commoditized market is inaccurate, foreseeing a future where tens of millions of people get sequenced regularly for various inherited risks. He noted that while the business is 'firing on all cylinders,' they are watching its performance month-to-month.

An analyst on for Ryan MacDonald asked about the anticipated impact on volume and reimbursement from becoming an in-network provider for Blue Cross Blue Shield plans. They also inquired about whether the current regulatory environment at the FDA is viewed as a headwind or a tailwind for Tempus.

Answer

CFO Jim Rogers explained that while going in-network with commercial payers provides an uplift to reimbursement, individual wins are not material due to a lack of payer concentration. He noted the largest 2025 ASP tailwinds are ADLT migration and Medicare reimbursement increases for the liquid biopsy test. CEO Eric Lefkofsky characterized the FDA environment as a net tailwind, stating that as an AI-enabled technology company, Tempus benefits from regulatory focus on efficiency and technology.

Ryan MacDonald asked about the current data purchasing environment, questioning if there were changes in how new customers make initial purchases. He also requested more detail on the AI Applications collaboration with Northwestern Medicine and its potential as a monetization pathway.

Answer

CEO Eric Lefkofsky stated that while interest remains strong with wins like BioNTech, the market lacks the tailwinds from a few years ago when biotech capital was more free, and the pattern of starting small and expanding remains typical. Regarding AI apps, he confirmed the Northwestern collaboration is a key example of deploying generative AI in health systems, but significant revenue generation is contingent on establishing reimbursement pathways, which is a long-term focus.

Ryan MacDonald asked about the Q4 implied EBITDA guidance, key investment areas, and how investors should think about the balance of growth and margin expansion heading into 2026. He also inquired about Google and Microsoft's $5 billion+ commitment to AI skilling, Coursera's potential role in these initiatives, and whether these companies might route or sponsor learners on the platform.

Answer

CEO Greg Hart explained that Coursera's annual EBITDA framework allows flexibility to invest in growth initiatives, with Q4 investments focusing on marketing efficiency and product innovation. He reiterated the long-term goal of annual revenue growth and EBITDA margin leverage. Regarding Google and Microsoft, Mr. Hart confirmed Google already routes learners and Microsoft is a content partner, noting ongoing dialogues to strengthen partnerships and leverage Coursera's broad catalog beyond just generative AI.

Ryan MacDonald questioned the Q4 implied EBITDA margin guidance, asking about key investment areas and the long-term framework for balancing growth and margin expansion into 2026. He also asked about Coursera's potential role in Google and Microsoft's multi-billion dollar AI upskilling initiatives, given their existing partnerships.

Answer

CEO Greg Hart explained the annual EBITDA margin framework allows flexibility for Q4 investments in marketing efficiency, new channels, and product innovation to drive future growth. He affirmed the long-term goal of annual revenue growth and EBITDA margin leverage. Regarding Google and Microsoft's AI initiatives, he noted ongoing dialogue and Coursera's broad catalog as a key benefit, with Google already routing learners and Microsoft being a content partner.

Ryan Macdonald of Needham & Company, LLC asked about the sustainability of consumer gross margin improvements and questioned the primary drivers behind the significant growth in new registered learners.

Answer

CFO Ken Hahn explained that consumer gross margins are benefiting from better revenue share economics on newer content, a trend he expects to continue. CEO Greg Hart added that the growth in new learners is global, with APAC showing strong momentum, and is driven by a combination of AI interest, the value of trusted content, and effective top-of-funnel marketing and pricing strategies.

Ryan MacDonald inquired whether new investments are primarily for the consumer business or if there are separate enterprise-specific initiatives, and asked about the implied EBITDA margin trend for the rest of the year.

Answer

CEO Gregory Hart detailed a threefold approach: core platform improvements benefit all segments, but there are also specific investments to enhance the enterprise experience (admin tools, curation) and consumer journey. CFO Ken Hahn explained the implied back-half margin trend is a mechanical result of budgeting for investment costs without yet forecasting the top-line benefits, and he expects to see near-term results from the investments.

Ryan MacDonald of Needham & Company asked about the 2025 outlook for the Consumer segment, focusing on the visibility into new certification launches, the mix of Gen AI content, and whether new models like DeepSeek could provide a tailwind.

Answer

CEO Jeff Maggioncalda expects more predictable consumer growth in 2025, driven by a diversified content portfolio from their Gen AI-powered engine and expansion in international markets. He anticipates job-specific AI titles will be in high demand. Both Maggioncalda and Chairman Andrew Ng noted that advances in foundation models like DeepSeek are beneficial, as Coursera leverages these technologies to enhance its own products. CFO Kenneth Hahn also highlighted recent stability in Coursera Plus subscriptions.

Ryan MacDonald inquired about the monetization lifespan of Consumer content and whether specific subject areas were experiencing softer international retention. He also asked for details on the weakness driving down the Enterprise segment's Net Retention Rate (NRR).

Answer

CEO Jeff Maggioncalda responded that content lifespan varies, but noted that even high-LTV entry-level professional certificates are seeing retention softness, likely due to macro factors. For the Enterprise NRR, he cited ongoing pressure from transitory government budgets but also highlighted signs of stabilization in the corporate market, driven by strong interest in generative AI, particularly in North America and EMEA.

Ryan Macdonald from Needham & Company asked about the role of Veeva Business Consulting in driving AI initiatives and if consulting projects could be a leading indicator for AI adoption. He also inquired about the market resistance facing the Compass Prescriber product.

Answer

CEO Peter Gassner affirmed that every AI project is fundamentally a business consulting project, as it redefines workflows, and agreed that tracking these projects is a leading indicator of adoption. Regarding Compass Prescriber, he acknowledged that adoption has been slower than expected due to underestimating the market's resistance to change, but noted they are now 'turning the corner'.

Ryan MacDonald asked for the key areas of incremental leverage in the strong operating margin guidance and whether spending patterns for Crossix were changing.

Answer

CFO Brian Van Wagener said margin leverage is broad-based, coming from gross margin improvements and OpEx efficiency across all departments. CEO Peter Gassner added that efficiency also comes from platform economies of scale. Regarding Crossix, Van Wagener stated there is no change to the shape of revenue and the business continues to have strong momentum.

Ryan MacDonald inquired about the thoroughness of the evaluation process for the Boehringer Ingelheim Vault CRM win and how it compares to other top-20 prospects. He also asked about the potential impact of new, free generative AI applications on gross margins.

Answer

EVP of Strategy Paul Shawah confirmed Boehringer Ingelheim conducted a thorough analysis and valued Veeva's consistent execution. CEO Peter Gassner clarified that GenAI applications will not materially impact gross margin, as paid offerings like MLR Bot will cover their compute costs, while free offerings like CRM Bot leverage the customer's own infrastructure. This is factored into the 2030 margin targets.

Ryan MacDonald asked about potential catalysts for adoption of the Safety suite and whether the Vault Basics offering could become a significant growth engine for the early-stage biotech segment.

Answer

CEO Peter Gassner suggested catalysts for Safety adoption could include issues at legacy providers or proven savings from connecting Veeva's EDC and Safety products. He expressed strong enthusiasm for Vault Basics, noting it opens up a new market segment and, more importantly, provides learnings on simplification that will benefit Veeva's entire enterprise business.

Ryan Macdonald of Needham & Company asked for clarification on renewal pressures, questioning the relative impact of macro uncertainty versus balance sheet issues, and inquired about the timeline for the Google Cloud and Databricks technology migrations.

Answer

CEO John Sabino explained the refinancing should salvage conversations with customers who had paused due to financial uncertainty. CFO & COO John Collins added that balance sheet concerns and the macro environment are interrelated, as financial instability increases competitive vulnerability. Regarding the tech migration, Sabino projected completion by early 2026, with some customers seeing benefits as early as October 2025 and new capabilities from Google's AI tools being tested now.

Ryan MacDonald inquired about the sales cycle elongation that caused deals to slip from Q1 to Q2, the impact of the macro environment, and the potential significance of the upcoming Amazon Connect integration for LivePerson's growth strategy.

Answer

CFO and COO John Collins explained that while the macro environment is a factor, the primary driver for deal slippage was new AI-related risk and compliance approval gates, noting the deals have since expanded in size and are on track to close in Q2. CEO John Sabino added that this reflects strong AI demand, not customers shrinking deals. Regarding the Amazon Connect integration, Sabino stated it aligns with their 'innovation without disruption' strategy, allowing customers to adopt LivePerson's AI capabilities without a costly 'rip and replace.' He anticipates a positive impact on their partner network and customer base, similar to their Avaya partnership.

Asked to compare the success of the EncircleRx program to other GLP-1 adoption channels and inquired about how market crosswinds (demand for GLP-1 solutions vs. macro uncertainty) are affecting the current selling season.

Answer

The EncircleRx (Evernorth) partnership is a key part of GLP-1 growth, and the new CVS relationship is building the future pipeline. The company sees GLP-1s as a tailwind for the whole business, attracting clients whether they cover the drugs or not. So far, they have not seen any macro uncertainty negatively impact their sales pipeline or cause decision delays, as chronic disease remains a top priority for clients.

Ryan Macdonald of Needham & Company asked if Duolingo Max and its 'video call' feature were successfully attracting more English learners. He also followed up on the DAU slowdown, questioning the risk of subscriber churn and whether the incident would alter the company's internal pace of AI adoption.

Answer

CEO Luis von Ahn confirmed that growth among English learners is outpacing other languages and that these users, particularly intermediate learners and those in Asia, are engaging more with 'video call' and show a higher propensity to purchase Max. Regarding the AI controversy, von Ahn and CFO Matt Skaruppa stated the financial impact was not material and is factored into the full-year guidance. They noted the guide's positives (Super, Energy) are partially offset by slower Max growth, lower Duolingo English Test demand, and a temporary pause on riskier, viral-potential social media content.

Ryan Macdonald from Needham & Company asked if Duolingo Max is successfully attracting more English learners and whether the recent DAU slowdown could impact subscriber numbers or the company's internal AI adoption strategy.

Answer

CEO Luis von Ahn confirmed that growth from English learners is outpacing other languages and that these users show higher engagement with Max's 'video call' feature. Regarding the DAU slowdown, he and CFO Matthew Skaruppa stated the financial impact was not material, concentrated in the U.S., and fully factored into the updated guidance. They noted the guide reflects both headwinds, like slower Max growth, and tailwinds, like strong Super performance, and does not change their internal AI strategy.

Ryan MacDonald from Needham & Company, LLC questioned the internal urgency to develop new generative AI features amid rising competition and how an 'AI-first' approach to hiring impacts unit economics and profitability.

Answer

CEO Luis von Ahn emphasized that AI is transformative for Duolingo and they are 'all in' to stay ahead of competitors. He and CFO Matt Skaruppa clarified that any cost savings from AI-driven efficiencies are being reinvested into developing new AI features to capture the large market opportunity, rather than being taken to the bottom line.

Ryan MacDonald asked about the use of AI to enhance content for the Math and Music courses and inquired about future monetization strategies for these subjects beyond the current model.

Answer

CEO Luis von Ahn highlighted that AI will be particularly transformative for Math, as improved reasoning in large language models will significantly accelerate the creation of K-12 and college-level content. For now, he stated that monetization for Math and Music will continue through the existing model of ads and subscriptions to remove ads and gain lives, with revenue being roughly proportional to their share of daily active users.

Ryan MacDonald inquired about the progress made with intermediate and advanced English learners since the initiative was highlighted six months ago. He also asked about the feature rollout speed and conversion trends for Android users.

Answer

CEO Luis von Ahn Arellano noted that while the content and user placement for advanced English learners are now solid, growth relies on word-of-mouth, which will take a couple of years to fully materialize. Regarding Android, he stated that feature rollouts are accelerating, now lagging iOS by only 3-6 months. He expressed optimism for Android monetization, as English learners—who are more prevalent on the platform—use the new Max conversation features twice as much as other learners.

Ryan Macdonald of Needham & Company asked about the mix of new payer members between commercial and Medicare, and inquired about the impact of state-level AI regulations, like those in Illinois, on Talkspace's product offering.

Answer

CFO Ian Harris stated that while Medicare and military segments grew, the vast majority of new member growth came from the core commercial business. CEO Jon Cohen addressed AI regulations by emphasizing Talkspace's belief that AI tools must have clinical oversight and operate in a HIPAA-compliant environment, positioning the company to meet future regulatory standards.

Ryan Macdonald of Needham & Company asked about the mix of new payer members between commercial and Medicare, and questioned the impact of emerging state-level AI regulations on Talkspace's product offerings.

Answer

CFO Ian Harris clarified that while Medicare and military segments grew, the vast majority of new member growth came from the core commercial business. CEO Jon Cohen addressed AI regulations by stating Talkspace's belief that AI tools must have clinical oversight and operate in a HIPAA-compliant environment, which they see as a key differentiator.

Ryan MacDonald of Needham & Company inquired about how Talkspace is using its strong Medicare outcomes data in rate negotiations and whether value-based care discussions are advancing. He also asked about the potential impact of federal behavioral health funding cuts on the company's business with schools and municipalities.

Answer

CEO Dr. Jon Cohen explained that quality metrics are a key differentiator and a substantial part of rate negotiations with payers, though direct value-based contracts are still in early stages. Regarding funding cuts, he stated that Talkspace has not seen a negative impact, as the cuts have targeted in-person programs. He suggested this could be a neutral-to-positive opportunity for Talkspace, as its virtual model offers a more scalable and less expensive alternative for school districts.

Ryan MacDonald inquired about the 2025 marketing strategy for new large populations like Medicare, the mix of channels being used, any impacts from Meta's ad restrictions, and the expected growth mix across the Payor, DTE, and Consumer segments.

Answer

CEO Dr. Jon Cohen detailed that the marketing strategy for seniors is different and still in early stages, focusing on channels like Facebook, direct mail, and onsite visits. CFO Ian Harris added that Meta is a small channel and its recent changes have not had a negative impact. Regarding the business mix, Harris projected that the Payor segment will continue its outsized growth, DTE growth will moderate as it laps the large New York City contract, and the Consumer segment's decline will continue to dissipate.

Ryan MacDonald asked about the Direct-to-Enterprise (DTE) pipeline mix between employers and municipalities, and whether ESSER funding was still a factor. He also inquired about the progression of conversations with payors toward value-based care contracts and the key metrics being tracked.

Answer

CEO Dr. Jon Cohen stated that most ESSER funding has expired and that the DTE sales strategy is complex, often based on geography and covering employers, municipalities, and associations, with a growing number of inbound RFPs. On value-based care, Dr. Cohen confirmed they have signed such contracts, with metrics focused on access and timeliness (e.g., time to first appointment), which he described as a 'nonissue' as they align with Talkspace's existing operational standards.

Ryan Macdonald from Needham & Company asked whether the Canadian expansion would use the Hims & Hers or Zava brand and questioned the market impact of generic semaglutide pricing. He also sought clarification on whether lower revenue per order in 2H implies accelerated subscriber growth.

Answer

CEO Andrew Dudum stated the Canadian launch will use the Hims & Hers brands while leveraging Zava's expertise, and he expects a significant market unlock with generic semaglutide priced around $75-$100. CFO Yemi Okupe clarified that the lower revenue per order comment was specific to personalized GLP-1s due to more frequent, smaller shipments, which does not necessarily mean overall average revenue per subscriber will decline sequentially.

Ryan MacDonald asked about subscriber retention and transition patterns for weight loss customers as the commercial semaglutide shortage ends.

Answer

CEO Andrew Dudum explained that customers on commercial doses are transitioning to various platform options, including branded drugs like Wegovy, generic injectables like liraglutide, and the company's oral compound kits. He highlighted the oral offering's strong value proposition, noting it provides about two-thirds of the weight loss for one-third of the cost of branded alternatives and is in high demand.

Ryan MacDonald asked about the subscriber mix between personalized and commercial GLP-1s, the regulatory risk of continuing personalized offerings, the launch timeline for liraglutide, and its potential pricing.

Answer

CFO Yemi Okupe stated that a majority of GLP-1 users are on personalized dosages, often because they previously struggled with commercial versions. CEO Andrew Dudum expressed confidence in the clear regulatory framework for clinically necessary personalization. Dudum projected a mid-year or early second-half launch for liraglutide, with pricing likely in the 'couple of hundred dollar' range, similar to current compounded options, due to higher costs associated with a daily injection.

Ryan MacDonald questioned how Hims & Hers directs customers between its oral weight loss options and GLP-1s and asked about any near-term plans to build out infrastructure for insurance reimbursement for branded drugs.

Answer

CEO Andrew Dudum described the platform as a neutral, "Switzerland"-like marketplace that helps patients find the right treatment for their needs, rather than using one product as a "Trojan Horse." He emphasized the strong value of the oral business. Regarding insurance, he stated that the simplicity of the cash-pay model remains the preferred approach, especially given the widespread lack of insurance coverage for obesity medications.

Ryan Macdonald from Needham & Company inquired about the expected trajectory for the Udemy Business segment, balancing renewal headwinds against pipeline optimism, and asked for more details on the new programmatic advertising revenue stream.

Answer

CFO Sarah Blanchard expressed confidence in a back-half acceleration for Udemy Business, citing strong pipeline growth and higher-value bookings. CEO Hugo Sarrazin added that the strategy now includes targeting budgets outside of traditional L&D. Regarding advertising, he explained that Udemy will begin piloting ads in Q3 to monetize its 39 million monthly visitors, viewing it as a significant new revenue opportunity.

Ryan MacDonald of Needham & Company asked new CEO Hugo Sarrazin for his key observations and near-term priorities, and questioned CFO Sarah Blanchard on guidance assumptions for Consumer 'Career Accelerators' and enterprise content consolidation trends.

Answer

CEO Hugo Sarrazin expressed excitement about the enterprise AI reskilling opportunity, the consumer shift to career ownership, and plans to lean into subscriptions and partnerships. He highlighted the need for better packaging of Udemy's offerings. CFO Sarah Blanchard noted that while Career Accelerators are promising, the consumer guidance remains prudent due to macro uncertainty. She confirmed that the trend of vendor consolidation continues, which benefits Udemy's broad platform.

Ryan MacDonald inquired about the monetization strategy for the consumer marketplace revitalization, asking if new features would be incrementally monetizable or primarily aimed at driving engagement and subscription conversions.

Answer

CFO Sarah Blanchard explained the strategy is a combination of both. While the primary goal is to enhance learner engagement, retention, and conversion to higher LTV subscriptions, she noted that features like the new career academies will also introduce direct monetization opportunities.

Ryan MacDonald from Needham & Company inquired about the new processes the CRO is implementing to target large customers and asked for more color on the expected 2025 business environment, particularly regarding the weakness in EMEA.

Answer

CEO Greg Brown stated that new CRO Rob Rosenthal is focused on developing sales capability, account planning, and enablement to sell effectively into key verticals and to senior buyers. CFO Sarah Blanchard added that the 2025 environment is expected to be similar to the current one, with elongated sales cycles, and clarified that EMEA weakness is related to pressured upsells, not churn.

Ryan Macdonald from Needham & Company asked why Yext has not issued a full-year top-line outlook despite strong Q1 results and momentum, probing the balance between business enthusiasm and macroeconomic caution. He also asked about the Scout beta program's goals, early ROI indicators, and its influence on future monetization strategies.

Answer

CEO Mike Walrath attributed the lack of full-year guidance primarily to macroeconomic uncertainty, stating the company will remain conservative despite strong internal momentum and favorable market trends like search fragmentation. Regarding Scout, Walrath highlighted overwhelmingly positive feedback from the initial 45 beta customers, noting high value perception and its role in demonstrating the worth of Yext's core products, which serves as an 'anti-commoditization' force. He added that long-term benefits include TAM expansion and new attachment opportunities.

Ryan MacDonald of Needham & Company inquired about the impact of the fragmented, AI-driven search environment on customer conversations and organic growth. He also sought clarification on the Q4 revenue guidance, which appeared to suggest a sequential decline, asking for a breakdown between core Yext and Hearsay performance.

Answer

CEO Mike Walrath stated that the fragmented search landscape is a primary topic with customers, viewing it as a long-term positive for Yext. Both Walrath and CFO Darryl Bond clarified that the Q4 guidance reflects FX volatility, with a benefit in Q3 and an expected headwind in Q4, and affirmed the core Yext business remains stable.

Ryan MacDonald from Needham & Company questioned how quickly Yext can begin recognizing revenue synergies from the Hearsay acquisition and what steps are being taken to target non-shared customers. He also asked about the adjusted EBITDA margin outlook, clarifying if Hearsay is currently dilutive and if future margin expansion will be driven by synergies or core business leverage.

Answer

CEO Mike Walrath explained that similar sales cycles and buyers should facilitate cross-sell opportunities, though the company will be patient with the product integration roadmap. CFO Darryl Bond confirmed the consolidated margin guidance includes Hearsay, which is slightly dilutive to overall margins at present. He stated that future margin expansion will come from operating the combined entity as one efficient business, rather than thinking about synergies and core leverage as separate items.

Ryan MacDonald inquired about the terms and total market opportunity for Chegg's new content licensing deals and sought details on the progress and feedback from its university pilot programs.

Answer

President and CEO Nathan Schultz explained that the content licensing deals are in their 'early days,' representing a very small portion of Chegg's 125 million high-quality, human-verified question-and-answer pairs. He sees a significant business model opportunity. Regarding the institutional pilots, Schultz noted strong momentum, growing from 5 to 15 pilots and targeting 40 by year-end. He described the seat-based license model as a key tool for universities focused on improving student persistence for financial reasons, adding that feedback has been very positive.

Ryan MacDonald inquired about the new enterprise and business-to-institution (B2I) offerings, specifically asking about the pricing model for the current pilot programs and how they create monetization opportunities.

Answer

CEO Nathan Schultz detailed that the B2I program, driven by inbound interest from schools focused on student persistence and graduation, uses a simple seat-based pricing model. The goal is to provide tools for every student, with plans to expand from current pilots to full campus-wide implementations. The company aims to have approximately 35 additional pilots by the end of the year.

Ryan MacDonald from Needham & Company inquired about the impact of Google's AI Overviews, asking how much traffic needs to be replaced and which new marketing channels are showing the most success. He also asked which student segments are showing the most traction.

Answer

President and CEO Nathan Schultz clarified that while Google's AIO places Chegg's organic listings lower, it doesn't eliminate all SEO traffic. He highlighted a holistic marketing strategy beyond SEO, including a strong direct channel and new initiatives on TikTok, Discord, and a Chrome extension to create product-driven growth. Schultz added that Chegg targets students seeking to improve competency and outcomes, noting that over 75% of students are willing to pay for such services. The product strategy is shifting towards practice and solution comparison to serve these deeper learning needs.

Ryan MacDonald asked about the quarterly revenue impact of removing the government vertical from guidance and the strategy for balancing SG&A cuts with readiness for new projects. He also inquired about demand drivers in the Payer segment, including the effect of Medicare Advantage plan transitions and the success of patient engagement initiatives.

Answer

CEO Lee Bienstock explained that any new non-migrant government revenue will be reported as upside to the revised guidance and confirmed they are balancing SG&A cuts with reinvesting in the growing Payer and Medical Transportation segments. For the Payer business, he cited strong demand from health plans aiming to reduce medical loss ratios and improve quality scores. CFO Norman Rosenberg detailed the expected 2025 quarterly revenue trajectory, predicting a decline in Q2 and Q3 before a slight Q4 uptick.

Matt Shea, on behalf of Ryan MacDonald, asked about the risk of the remaining 2025 migrant revenue winding down even faster and whether the impact was fully captured in the revised EBITDA outlook. He also requested an update on the specific targets for the payer business, including care gap closures and primary care patient enrollment. Lastly, he asked for an update on the "Project Prime" subcontracting initiative.

Answer

CEO Lee Bienstock confirmed it's possible migrant revenue could be less than the projected $50 million, and the cost of transitioning staff is factored into the lower EBITDA guidance. He reiterated targets for the payer business, noting the care gap visit run rate is expected to exceed 2,000/week by year-end. Regarding "Project Prime," he reported signing two subcontractor contracts with VA service providers and stated the company is focusing on bipartisan, evergreen municipal needs like veteran care.

Ryan MacDonald of Needham & Company asked for clarification on the revised 2024 base business forecast and inquired about the impact of recent Medicare Advantage Star Ratings news on the payer services pipeline.

Answer

CEO Lee Bienstock clarified the 2024 forecast revision was due to the extended timeline of certain migrant contracts, which only impacts the revenue mix, not the consolidated total. He also confirmed the Star Ratings issue is a significant tailwind, accelerating demand and leading to new and expanded contracts with payer partners.

On behalf of Ryan MacDonald, Matthew Shea asked about customer churn during the quarter, the outlook for intentional churn, and any observed differences in demand between health systems and payers.

Answer

CFO and COO Mark Hirschhorn reported that Q1 churn was much lower than the conservative budget, suggesting the heaviest churn periods are over. He also noted significant pipeline growth from both payers and health systems, with activity far exceeding the previous year, indicating strong market interest in Amwell's offerings.

Ryan MacDonald from Needham & Company asked for clarification on the Defense Health Agency (DHA) contract, questioning the deployment timeline and the status of the 2025 contract renewal process.

Answer

CEO Ido Schoenberg stated the enterprise-wide deployment remains on track for the end of 2024. Regarding the renewal, he noted the DHA announced its intent to offer a sole-source contract to Amwell's partner, Leidos, which specifically named Amwell's products, indicating a positive outlook.

Ryan MacDonald of Needham & Company asked about the adoption trends for generative AI, particularly the new AI Agent Studio, and whether a tighter macro environment would accelerate or pause these initiatives. He also questioned if the LiveIntent business would react differently to macro pressures compared to the core Zeta business.

Answer

CEO David Steinberg stated that AI adoption is accelerating, not pausing, due to macro uncertainty, with a meaningful step-up in Q1. He noted customers using AI grow revenue over 40% faster. CFO Chris Greiner addressed the LiveIntent question, confirming it performed in line with expectations and that its synergies and jointly developed products are benefiting the organic business, making the combined entity more resilient.

Ryan MacDonald from Needham & Company inquired about the challenges and benefits of the 'One Zeta' consolidated sales motion, its impact on RFP flow, and the competitive landscape, particularly regarding recent moves by walled gardens like Meta.

Answer

CEO David Steinberg stated that the 'One Zeta' initiative is successfully breaking down internal silos and leading to more comprehensive RFPs, with new executive hires accelerating this shift. CFO Chris Greiner added that the average deal size in the pipeline is up 35% year-over-year. Regarding competition, Steinberg asserted that Zeta partners deeply with walled gardens like Meta and is not seeing a threat from them or from new, smaller startups.

Ryan MacDonald from Needham & Company asked about progress in the independent agency channel, including customer wins, deal sizes, and sales cycles. He also inquired about the go-to-market motion, seasonality, and margin profile of the acquired LiveIntent business.

Answer

CEO David Steinberg confirmed multiple contracts with independent agencies, noting they are high-margin, on-platform deals with a sales cycle between that of enterprise and holdcos. He explained LiveIntent is a high-margin business with a similar hunter-farmer sales model, facilitating integration and significant cross-sell opportunities.

Ryan MacDonald from Needham & Company asked about progress in the independent agency channel, including initial deal sizes and sales cycles, and also inquired about the go-to-market motion, seasonality, and margin profile of the newly acquired LiveIntent business.

Answer

CEO David Steinberg confirmed multiple contracts with independent agencies, noting they are high-margin, on-platform deals with a sales cycle between that of enterprise clients and large holdcos. Regarding LiveIntent, Steinberg described it as a high-gross-margin business with a slight Q4 seasonality, highlighting significant cross-sell opportunities. CFO Christopher Greiner added that LiveIntent's hunter-farmer sales model integrates well with Zeta's.

Ryan MacDonald from Needham & Company inquired about the growing contribution from SI partners to the sales pipeline and its impact on sales investments. He also asked about the potential risk of customer downsells due to broader, Gen AI-driven headcount reductions in the market.

Answer

CEO Alessio Artuffo noted significant growth in SI partnerships, with two SIs driving over 70% of influenced deals, and stated that Gen AI is viewed as an accretive opportunity, not a risk. Interim CFO Brandon Farber added that SIs handling implementations reduces professional services headcount needs, improving margins. He also highlighted that 65% of ARR is from external use cases, insulating it from internal corporate headcount changes.

Ryan MacDonald from Needham & Company inquired about Docebo's AI monetization strategy, customer appetite for paying for new AI solutions, and the early feedback on the new pricing methodology, particularly its effect on sales cycle length.

Answer

Interim CEO Alessio Artuffo explained that AI monetization is a key focus, with plans for an advanced AI authoring solution and other monetizable features like virtual coaching. He noted customers are increasingly seeking tangible business benefits over flashy features. CFO Sukaran Mehta reported that the new value-based pricing methodology has been successful in its first quarter, helping to accelerate deal cycles for new business by focusing conversations on solving customer problems.

Ryan MacDonald asked about the expected timeframe for completing the unified product strategy and whether this unification is a critical component for achieving the forecasted return to sequential growth in the second half of 2025.

Answer

CEO Kevin Coop explained that the unification is a multi-step process. The initial, customer-facing elements like single sign-on and a unified UI/UX are 'imminent'. The deeper, back-end data integration will take longer. He confirmed that improving ease of use through this platform unification is a 'very important pillar' for addressing customer churn and is crucial for returning to growth.

Asked about the impact of marketing spend optimization on utilization rates for both direct-to-consumer and enterprise platform services, and how this is being messaged to prospective customers.

Answer

Rajeev Singh explained that DTC marketing is managed weekly based on customer acquisition cost vs. lifetime value. For B2B, they are now working more collaboratively with clients to share marketing costs for specific campaigns to drive value, a motion that has been productive. Steve Barnes added that client partnership is key to efficient marketing spend.

Questioned if Parchment's growth was lower than expected due to factors like FAFSA delays and asked about K-12 budget priorities with the end of ESSER funding approaching.

Answer

Parchment's growth is in line with expectations, with the focus being on the high single-digit combined ARR growth. In K-12, ESSER funds are being used for non-recurring costs, which supports new implementations, and there is growing interest in edtech management tools to prepare for future budget rationalization.

The analyst asked for more details on the inventory delays and their potential effects, inquired about the performance and pipeline of the First Day Complete program, and questioned the strategy regarding future store closures.

Answer

The company clarified that inventory delays affected both course materials and general merchandise but were managed to minimize impact and will not affect annual guidance. For the First Day Complete program, it's an opt-out model with strong participation rates and a healthy pipeline for future semesters. Regarding store closures, the company confirmed it's an ongoing strategy to wind down unprofitable locations, with the ultimate number of stores depending on the success of converting them to the more profitable First Day Complete model.